Shares tumble after China kicks back at Trump's tariffs

FTSE 100 suffers worst losses since start of Covid pandemic

- ALASTAIR JAMIESON

Share prices tumbled around the world yesterday – with Britain’s FTSE 100 suffering its worst drop since the start of the Covid-19 pandemic – as the global trade war intensified with China’s retaliatory imposition of a 34 per cent tariff on imports of all US products.

Trillions of dollars have been wiped from the markets since Donald Trump announced a range of import taxes on goods from other countries. British exports to the US face a blanket 10 per cent levy.

Sir Keir Starmer is due to hold talks with world leaders over the weekend, as nations reel from the economic hit and decide whether to reciprocate with tariffs on Washington. The prime minister was on Thursday urged not to retaliate by his predecessor Sir Tony Blair, who said that such a move would not be in the UK’s “best interests”.

Economists warn that escalating the situation could generate a spike in inflation and weaken growth, even triggering recession.

The collapse in share values creates a big dent in many British pension funds, and there are fears that China will respond to the US tariffs by flooding other countries with cheap exports, further harming British firms.