Trump tariffs day 4 as it happened: Trump threatens extra 50% tariff on China in day of wild market swings

US stocks closed slightly lower after a day of wild swings on Wall Street as traders remained fixated on Donald Trump’s tariffs.

The blue-chip S&P 500 lost 0.2 per cent, extending a historic sell-off at the end of last week that was sparked by Trump’s so-called liberation day tariffs on US imports and concerns that the levies will damage the global economy. 

The tech-heavy Nasdaq Composite ended the day up 0.1 per cent.

Donald Trump said the US and Israel were in talks over establishing an entirely new trade deal.

When asked if he would reduce the new 17 per cent tariffs on Israeli goods, Trump said “we’re talking about a whole new trade. Maybe not, maybe not.”

“Don’t forget, we help Israel a lot” militarily with security funding, he added.

Donald Trump said the EU must buy energy from the US to rebalance the traditional allies’ relationship.

“They’re going to have to buy our energy from us, because they need it,” he said from the Oval Office.

“We have more energy than any country . . . from oil and gas to coal,” Trump said.

He claimed that if the EU bought US energy, it would “knock off $350bn in one week” from Washington’s trade deficit with the bloc.

Trump said he would “reset the table on trade” and that the US was “making tremendous progress with a lot of countries”.

“No other president would be willing to do what I’m doing or to even go through it,” he said.

“The countries that really took advantage of us are now saying ‘please negotiate’. You know why? Because they’re getting beaten badly because of what’s happening,” Trump said.

Donald Trump lashed out at the EU from the Oval Office, saying the bloc was formed “to really do damage” to the US on trade.

“They formed together to create a little bit of a monopoly situation, to create a unified force against the United States for trade,” Trump said, continuing to lash out at the group of US allies for what he sees as an unfair relationship.

With the US’s contributions to Nato, “we’re paying them to guard them militarily, and they’re screwing us on trade. So that’s not a good combination,” he said. 

“The European Union’s been dead to us” on trade, Trump added.

Trump tried to resolve confusion over whether the US would negotiate its tariffs away on Monday by saying US tariffs could be permanent, but also subject to negotiation.

“There can be permanent tariffs and there can also be negotiations, because there are things that we need beyond tariffs,” Trump said, when asked by a reporter about conflicting messages from the administration.

“We’re going to get fair deals and good deals with every country, and if we don’t, we’re going to have nothing to do with them, they’re not going to be allowed to participate in the United States,” Trump said.

Israeli Prime Minister Benjamin Netanyahu vowed in his bilateral meeting with Donald Trump that Israel “will eliminate the trade deficit with the United States. We intend to do it very quickly. We think it’s the right thing to do.”

Speaking alongside the US president in the Oval Office, the prime minister added that “we’re going to also eliminate trade barriers that have been put up unnecessarily.”

Trump said he and Netanyahu had “great discussions” on trade, as the prime minister essentially capitulated to Washington’s demands.

Netanyahu said, “Israel can serve as a model for many countries who ought to do the same.”

The benchmark 10-year Treasury yield rose by as much as 0.2 percentage points on Monday to 4.19 per cent, as the market sell-off in response to President Donald Trump’s tariffs extended to safe-haven assets such as US government bonds. 

Monday’s move at about mid-afternoon in New York represented the biggest daily increase in the 10-year yield since 2022. The moves extended across the maturity spectrum with the biggest moves in longer-dated bonds. That debt is typically more sensitive to growth and inflation expectations. 

The sell-off in bonds was likely driven in part by a “dash for cash”, trading sources said, in which market participants like hedge funds sell off assets for cash to close out positions or meet other capital calls. 

The US will open trade negotiations with Japan as countries scramble to strike a deal with Donald Trump’s administration that could see them avoid punitive tariffs.

US Treasury secretary Scott Bessent said on X on Monday afternoon that he and US trade representative Jamieson Greer had been asked by Trump to open the negotiations with Japanese Prime Minister Shigeru Ishiba and his cabinet.

“Japan remains among America’s closest allies, and I look forward to our upcoming productive engagement regarding tariffs, non-tariff trade barriers, currency issues, and government subsidies,” Bessent wrote.

“I appreciate the Japanese government’s outreach and measured approach to this process.”

A White House official has said that while Donald Trump was “willing to hear countries out”, Washington had not yet held serious negotiations over lowering its tariffs on trading partners.

“We’re very focused on the national emergency,” the official said, referring to the US trade deficit that is being used to justify the US’s sweeping tariffs on allies and partners.

Trump posted on Truth Social this morning that “negotiations with other countries, which have also requested meetings, will begin taking place immediately”.

But a White House official cautioned: “We’re using that word . . . but it’s not a negotiation until it is one. We’re willing to hear other countries out, and hear these other offers out.”

Israeli Prime Minister Benjamin Netanyahu has arrived at the White House, where he was greeted by Donald Trump, but their joint press conference, originally scheduled for Monday afternoon, has been abruptly cancelled.

The two leaders will still take questions in the Oval Office at about 2pm Eastern time. The White House did not immediately provide a reason for the cancellation.

Netanyahu is the first world leader to come to Washington to discuss tariffs with Trump. Israel was hit with a 17 per cent tariff, even after it pre-emptively cut duties on various imports from the US as part of Trump’s sweeping so-called liberation day tariffs.

The Israeli prime minister met with US commerce secretary Howard Lutnick and trade representative Jamieson Greer late on Sunday night to explore potential trade co-operation under new terms.

Investors said extreme market volatility meant it was currently too risky to short US stocks, as the S&P 500 whipsawed back and forth on a turbulent day on Wall Street.

“I don’t want to be short anything,” said one hedge fund manager who asked to remain anonymous, pointing to the S&P’s brief rally earlier on Monday on rumours — which were subsequently denied by the White House — that the US president was considering a 90-day pause on tariffs.

Marko Kolanović, JPMorgan’s former chief global markets strategist, told the Financial Times that opening new negative bets on US stocks right now would be “incredibly risky”.

There is “short squeeze risk if there is incremental positive news,” he said, warning of a potentially “vicious” bear market rally. 

BlackRock chief executive Larry Fink warned that the US economy was “weakening as we speak” and that it was possible stocks could fall another 20 per cent after the current rout, as President Donald Trump’s trade war sent shockwaves through markets.

The 72-year-old told a gathering of chief executives and investors in New York that there was “a real downturn” developing in several sectors and that “more and more people were pausing and slowing down consumption”.

“The market is impacting Main Street,” he said.

Fink said he was troubled that the US was destabilising markets globally and that he saw “zero chance” the Federal Reserve would cut interest rates as investors were currently pricing, given the inflationary pressures developing.

“I’m concerned about inflation if all the proposed tariffs truly go into place,” he said.

Bangladesh has offered to buy more US liquefied natural gas, cotton, wheat, corn and soybeans in a bid to fend off a 37 per cent reciprocal tariff placed on its exports by President Donald Trump.

Muhammad Yunus, who heads the south Asian country’s interim government, said on Monday evening that he had written to Trump asking him to postpone the application of US reciprocal tariffs for three months “to smoothly implement its initiative to substantially increase US exports to Bangladesh”. 

Yunus also said he had indicated further tariff cuts on US products, including gas turbines, semiconductors, and medical equipment. “Bangladesh will take all necessary actions to fully support your trade agenda,” the Bangladeshi leader said in a post on X. 

Airlines and aircraft manufacturers are increasingly concerned that US tariffs will cause major disruption to aviation supply chains, which have been under pressure since the Covid-19 pandemic.

Production lines across the industry have been strained coming out of the Covid-19 pandemic and as global airlines have gone on an unprecedented ordering spree. Problems at engine makers have compounded the challenges.

The European Regions Airline Association, which represents manufacturers including Airbus as well as suppliers and regional carriers, said the tariffs would “impose severe financial burdens on both EU and US airlines”.

There are also concerns over the maintenance of aircraft, which relies on spare parts crossing borders.

“Additional tariffs on spare parts would further disrupt the aviation supply chain, increase operational costs and potentially impact flight safety and reliability,” the ERA said. 

The global default rate could reach 8 per cent in the next year as the Trump administration’s barrage of tariffs raised the likelihood of a recession, said Moody’s Ratings.

The figure, which includes the proportion of borrowers around the world that Moody’s rates and default on their debt, jumps during economic downturns. However, a default rate of 8 per cent would still fall below the record of a 9.7 per cent rate in 2000 when the dotcom bubble collapsed.

“The tariffs announced by the White House on Wednesday heighten corporate credit risk, increasing the likelihood of defaults and wider spreads — trends that are already beginning to emerge,” said David Hamilton, managing director and head of Moody’s Asset Management. 

“The uncertainty dial just got turned up to 11.”

Donald Trump has threatened additional 50 per cent tariffs on China if Beijing does not withdraw its retaliatory levies on Washington by Tuesday.

“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote on Truth Social on Monday.

The Trump administration hit China with 34 per cent in additional duties last week, stacked on top of the 20 per cent levies it had already imposed. In response, China increased levies on US goods by an additional 34 per cent, though it held back some firepower for any negotiations. 

Trump threatened to cancel all negotiations with China unless Beijing scaled back the levies: “all talks with China concerning their requested meetings with us will be terminated!”, he said. However, people familiar with the situation in Beijing and Washington said there had been no serious discussions of any kind between the two capitals.

Trump’s threat to sharply boost duties on China, the world’s biggest exporter, came on a day of acute volatility in US markets.

The blue-chip S&P 500 share index swung in a wide range, but closed down only 0.2 per cent. Apple, which is heavily exposed to China through its supply chains, dropped 3.7 per cent. The tech-heavy Nasdaq Composite ended the day up 0.1 per cent.

Commodity markets were also under pressure, with Brent crude, the international marker, and West Texas Intermediate, the US benchmark, each settled about 2.1 per cent lower. Copper, a widely used industrial metal that is viewed as a proxy for sentiment on the global economy, fell 2.3 per cent.

Wall Street stocks swung violently in morning trade as investors responded to a market rumour suggesting US tariffs would be less aggressive, a claim that was quickly denied by the White House.

When asked if Donald Trump would consider a 90-day pause on tariffs, Kevin Hassett, director of the National Economic Council, told Fox News on Monday that “I think the president is going to decide what the president’s going to decide.”

Afterwards, reports circulated on social media and cable news that Trump was considering a 90-day pause on tariffs for all countries except China.

The White House issued a denial: “Wrong,” it said on X. “Not only did Director Hassett not say this . . .@POTUS has been clear — it all has to change, but especially with CHINA!!!”

The blue-chip S&P 500 had opened sharply lower on Monday but surged shortly after 10am as traders snapped up equities on hopes of lower tariffs.

The index quickly gave up the gains, falling back to 2 per cent below its opening level, before then erasing those losses to be flat on the day by 11am in New York.

The tech-heavy Nasdaq whipsawed just as aggressively.

The EU is reducing its retaliation against US steel tariffs after member states lobbied to protect their industries. 

EU trade commissioner Maroš Šefčovič said it would hit less than the planned €26bn in US goods with duties after he had listened to governments.

“We are not in the business of tit-for-tat” retaliation, he told reporters, with EU measures now less than the US ones. France and Italy asked for bourbon whiskey and other products to be removed, fearing US counter measures.

The final list of goods will be sent to member states today and they will vote on April 9.

Poland’s bourse halted trading for more than an hour on Monday as the tariff-related rout in global markets hit central Europe.

The Warsaw Stock Exchange said that it had suspended trading between 1315 and 1430 GMT for “safety reasons”, after Poland’s share benchmark dropped as much as 7 per cent on Monday, taking the WIG 20 index to its biggest three-day loss since Russia’s invasion of Ukraine in 2022.

“The stock market earthquake from Japan through Europe to America must be survived without nervous decisions,” Polish Prime Minister Donald Tusk said on X. “The Polish stock market also got a ricochet, but political and economic stability are our assets in this difficult time.”

Treasury yields rose dramatically on Monday morning after days of declines, amid volatile trading.

The 10-year Treasury yield, which moves with growth expectations, was last up 0.16 percentage points to 4.15 per cent. The two-year yield, which moves with interest rate expectations, was last up 0.17 percentage points at 3.82 per cent. Yields move inversely to price.

Sir Keir Starmer has insisted he will not raise key taxes or bend Britain’s fiscal rules, despite the threat posed to the UK’s public finances by a global trade war.

Asked whether he was standing by Labour’s manifesto commitment not to raise income tax, value added tax or employee national insurance contributions, the UK prime minister said: “That’s a commitment we have made and a commitment we will keep.”

Speaking at a car factory in the West Midlands, he insisted that he would not relax fiscal discipline, warning it would fuel economic instability.

“The fiscal rules were put in for a purpose,” he said. Chancellor Rachel Reeves said she would be “doubling down on economic stability”.

Record volumes of US equities were traded on Friday as the Trump administration’s tariffs sparked a seismic Wall Street sell-off that continued early on Monday.

Investors have massively slashed their US equity holdings in recent days, according to Bloomberg data, as Donald Trump’s tariffs fan concerns about the trajectory of the world’s economy.

Goldman Sachs said: “We are witnessing the biggest three-day sell-off in nearly 40 years, a bigger drop than any point during the [great financial crisis] and Covid pandemic.”

Sir Keir Starmer has warned of a new “era of global instability”, saying that the fallout of Donald Trump’s tariffs could resonate for years to come.

Speaking at a Jaguar Land Rover plant in the West Midlands, the UK prime minister said: “Nobody is pretending that tariffs are good news.” He added that the threat of a global trade war posed “a huge challenge for our future”.

Starmer said it made it even more important to press ahead with domestic economic reforms, including ripping up regulation. “This is not a passing phase,” he said.

US stocks sank at Monday’s open as the rout triggered by Donald Trump’s tariffs deepened, sending the S&P 500 benchmark into bear market territory.

The S&P was down 2.1 per cent after the market open. It had earlier fallen as much as 4 per cent, briefly entering a bear market as losses since February’s all-time high exceeded 20 per cent. The Nasdaq Composite lost 2.1 per cent.

Nigeria’s central bank has spent $200mn of its dollar reserves to shore up the value of the naira, after the currency slid more than 3 per cent on the back of US President Donald Trump’s “reciprocal” tariffs.

Africa’s most populous country was hit by a 14 per cent tariff on Trump’s so-called liberation day. The central bank said it sold $197mn to authorised traders in the foreign exchange market over the weekend. People familiar with the matter said the bank had also sold dollars on Monday.

Nigeria’s main export to the US is crude oil; it relies on crude exports for more than 70 per cent of its foreign earnings and half of the government’s revenues.

Junk bond markets came under renewed pressure on Monday as investors fretted over an intensifying trade war sparked by Donald Trump’s tariffs.

The high-yield credit default swap index, which gauges risk in lower-rated bonds, rose again Monday as investors anticipated a higher number of corporate defaults among riskier US companies.

Spreads on the Markit North America CDX high-yield index rose 3.2 per cent to more than 450 basis points on Monday, climbing nearly 150 points since early March.

High-yield bond spreads — the premium over government debt paid to investors in risky corporate debt — last week experienced their biggest increase since 2020.

Minutes before Wall Street opened, Donald Trump said he had spoken to Japanese Prime Minister Shigeru Ishiba and that their governments would begin talks on tariffs.

“Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate!”, Trump wrote on Truth Social on Monday.

“They have treated the U.S. very poorly on Trade. They don’t take our cars, but we take MILLIONS of theirs. Likewise Agriculture, and many other ‘things.’ It all has to change, but especially with CHINA!!!,” he added.

Japan’s prime minister Shigeru Ishiba told reporters in Tokyo that he had told the US president that the heavy tariffs on Japan were very disappointing, had urged him to rethink and reminded him that Japan had been the largest investor in the US for the past five years.

Donald Trump’s trade adviser Peter Navarro has forecast “a beautiful situation” in which the benchmark S&P 500 enjoys “a broad based recovery” and the Dow Jones hits 50,000 points. 

Navarro told retail investors not to get “panicked out” by the market rout because the “broadest based tax cut in American history is coming within a matter of months”. 

The Dow Jones fell 3 per cent at Monday’s open, to about 37,100 points. The S&P 500 entered a bear market on Monday, down 20 per cent from its recent high.

Speaking on CNBC’s Squawk Box just before Monday’s open, Navarro added that Vietnam’s offer to remove tariffs on US imports “means nothing to us” because the administration’s concern is with the “non-cheating tariffs”, of which he said one example was China shipping through Vietnam to avoid levies.

Brussels has said it had repeatedly offered the US a deal to eliminate all industrial goods tariffs between them.

European Commission president Ursula von der Leyen said on Monday that the EU had previously offered Washington “zero-for-zero tariffs on industrial goods”, particularly cars, adding that “Europe is always ready for a good deal so we keep it on the table”.

Applied tariffs on goods traded between the EU and US were just over 1 per cent before Donald Trump’s recent rises.

The EU has prepared a list of retaliatory measures but von der Leyen said that the bloc preferred a “negotiated solution”.

Investors should “consider avoiding panic” and use spare cash to buy “ultra-short and short-term fixed income” assets, Morgan Stanley has told its clients, as the Trump administration’s tariffs continue to rock global financial markets.

“Rather than being a market-clearing event that would provide the certainty many hoped for, ‘liberation day’ revealed a worst-case reciprocal-tariff scenario,” said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.

In a note to clients on Monday, Shalett wrote that investors should withhold “rebalancing flows to global equities — other than to Japan, which may benefit from inflows to the defensive yen”.

Downing Street has claimed that there is a growing view in the west that it would be ill-judged to stoke a trade war with the US, following Sir Keir Starmer’s calls in recent days with a number of fellow leaders.

“I think it’s widely agreed that a global trade war is not in anyone’s interests,” a spokesperson said. The UK prime minister has recently spoken to leaders including Canada’s Prime Minister Mark Carney, Germany’s chancellor-in-waiting Friedrich Merz and European Commission president Ursula von der Leyen.

However Downing Street rejected suggestions that Donald Trump’s tariffs would encourage Starmer to pursue a bolder agenda in his “reset” talks with the EU to boost trade. “But we think we can get a much better trading relationship with the EU,” they added.

Credit strategists at Deutsche Bank have warned that “crippling policy uncertainty, haphazard tariff rate calculations, a partial loss of confidence in US institutional norms and rising inflation are all notably increasing US risks”.

This means, they said on Monday, that “it is too early to buy the dip; some US policy credibility has been permanently lost and this will feed into rising stagflation concerns and weaker earnings”.

Donald Trump’s sweeping so-called reciprocal tariffs last week triggered the biggest sell-off in US junk bonds since 2020. The “spread” or premium demanded by investors to hold speculative-rated corporate debt over US government bonds jumped by 1 percentage point to 4.45 percentage points between Wednesday and Friday alone.

Credit investors continued to sell out of Europe’s automotive industry on Monday sending some bond prices to record lows, while the cost of insuring against other borrowers defaulting on their debt soared.

The prices of Aston Martin’s bonds issued last year fell to all-time lows on Friday and continued to drop on Monday, with one bond tumbling 9 per cent since Friday to 82 pence on the pound.

The cost of insuring against Volkswagen defaulting on its bonds has climbed by more than 30 per cent since Thursday, to the highest levels since the Covid-19 pandemic, as investors increased their bets that the German carmaker would struggle to service its debt.

The Vix index of market volatility is now pricing in a recession, according to UBS.

“We are now in a new volatility regime,” said Max Grinacoff, the bank’s head of US derivatives strategy.

“We believe this is not technical, but rather fundamental. That should be more concerning, in our view.”

Donald Trump has doubled down on his so-called reciprocal tariffs, saying they are already bringing in “Billions of Dollars a week” and reiterating a “warning for abusing countries not to retaliate”.

In a post on his Truth Social network, the US president said other countries had for decades been “taking advantage of the Good OL’ USA”.

Hong Kong’s financial secretary has ruled out using “drastic” market-supporting measures after the territory’s benchmark Hang Seng index plummeted more than 13 per cent on Monday in the wake of Donald Trump’s tariffs, its worst single-day fall since the Asian financial crisis.

“Our market’s . . . resilience [is] strong [and] the buying power remains very strong,” Paul Chan told reporters. “We do not think the current volatility in the market warrants any drastic measures to be taken.”

European stock markets are on course for one of their worst three-day stretches in recent decades, with the Stoxx Europe already down 12 per cent since last Wednesday’s close.

Some content could not load. Check your internet connection or browser settings.

Over the past 40 years, the Europe-wide index has fallen further over that timeframe on a handful of occasions, all of them around the 1987 crash, the global financial crisis in 2008 and the early stages of the Covid pandemic in 2020.

In recent weeks, European stocks had benefited from the prospect of fiscal stimulus in Germany and a rotation away from the US. But they have now given up all their gains for the year. 

Italian Prime Minister Giorgia Meloni aims to travel to Washington DC “in the next few weeks” for talks with Donald Trump as part of EU efforts to persuade the US administration to roll back 20 per cent tariffs imposed on European imports.

Antonio Tajani, Italy’s foreign minister, said he would like a “zero tariff-zero tariff” agreement between the US and the EU but that, as an intermediate step, he hoped the US would reduce its so-called reciprocal tariffs on European goods to 10 per cent.

“We are working in synchrony with the EU,” he said, emphasising Rome’s commitment to supporting the bloc’s initiatives.

The head of the world’s largest sovereign wealth fund warned that the market turmoil sparked by US tariffs could lead to stagflation and widescale disruption to global supply chains.

Nicolai Tangen, head of Norway’s $1.6tn oil fund, said on Monday that its own stress tests showed the investor could lose as much as 40 per cent in value “in a scenario with a more fragmented world” but that it could withstand “periods of significant volatility”.

Markets were reacting to the possible consequences of a trade war, he added, including “slower growth, disruption to supply chains, and potentially higher inflation”.

Investors are betting the Federal Reserve will cut US interest rates as many as five times this year as it battles an economic slowdown sparked by Donald Trump’s tariff blitz.

Futures markets are pricing in either four or five quarter-percentage point reductions by December, up from four on Friday and fewer than three early last week.

The figures suggest investors are betting the Fed will be forced to prioritise supporting the economy over any action to snuff out a renewed burst of inflation resulting from tariffs.

French budget minister Amélie de Montchalin ruled out public spending to support French businesses through the shock of US tariffs, instead saying that Europe would seek to lower the newly erected trade barriers.

“We are not going to take a ‘whatever it takes’ approach,” she said, in reference to the generous support given to businesses during the Covid-19 pandemic.

“There is no plan in France nor elsewhere in Europe to, in the first instance, support business through public spending. Our goal is to get out of these absurd and dangerous measures that are economically negative and harmful for all,” she told journalists at an event organised by the Ajef association of economic and financial journalists.

Elon Musk is “afraid” for his businesses and the economy, Germany’s trade minister said, as he ripped into the US administration’s tariff increases.

The tech billionaire, who helped fund Donald Trump’s re-election, suggested at the weekend that the EU and US should negotiate a “zero tariff” free trade zone.

But Robert Habeck said the suggestion was “a sign of weakness and maybe fear” as Musk concluded that his businesses and the economy “were going to crumble”.

“He should go to his president and say: ‘Before we talk about zero tariffs let us stop the mess you have made in the last week’,” Habeck said, adding: “This is ridiculous.”

The EU and US should negotiate a “zero tariff” free trade zone, Sweden’s trade minister said.

Benjamin Dousa on Monday backed a call by Italy and other countries for the move. Average applied tariffs on both sides are just over 1 per cent, but there are particularly high barriers to agricultural goods.

He said the EU should be prepared to respond to the 20 per cent tariff on most of its goods imposed by US President Donald Trump with countermeasures, including against technology and other US services exports.

“All options are on the table,” he said.

Shares in airlines exposed to transatlantic travel tumbled further on Monday, amid growing concerns that demand for flying will be hit by a slowdown in the US economy and trade tensions.

British Airways owner International Airlines Group, Air France-KLM and Lufthansa each fell 7 per cent, taking their losses to more than 15 per cent since US President Donald Trump announced his global tariffs.

“The north Atlantic is crucial to the economics of the European flag carriers and we see simultaneous threats to corporate, premium leisure and leisure travel originating at each end of the route,” analysts at Barclays said.

The price of bitcoin dropped 3.6 per cent on Monday, close to wiping out all of its gains since Donald Trump’s US election victory, as tariff fears extended the slump in cryptocurrency prices this year.

Bitcoin was trading at $76,160 a token, its lowest level since the day after Trump’s win over Kamala Harris last November. The price of ether, tied to the Ethereum blockchain used for building crypto-based finance projects, slumped 5.7 per cent to $1,486 per coin, its lowest level since the collapse of Silicon Valley Bank in March 2023. Solana, a rival to ether, dropped 5.4 per cent.

Crypto prices have tumbled this year even as Trump pledged a crypto-friendly approach to US policy and regulation, as traders have grown concerned at the US’s aggressive tariff policy and sold off riskier assets.

Germany’s chancellor-in-waiting Friedrich Merz described the global market rout as “dramatic” and warned of further turmoil in his first comments since US President Donald Trump unveiled sweeping tariffs.

“The situation on the international equity and bond markets is dramatic and threatens to deteriorate further,” he said in an emailed statement to Reuters on Monday. “It is therefore more urgent than ever for Germany to restore its international competitiveness as quickly as possible.”

The leader of the conservative CDU party added: “This issue must now be at the centre of the coalition negotiations.”

Merz is locked in tense negotiations with the Social Democrats to agree a coalition deal this week.

Donald Trump’s tariffs could lead to a new “great depression”, Poland’s junior trade minister Michał Baranowski warned on Monday.

He said Trump’s so-called reciprocal tariffs of at least 10 per cent on most of the world were the highest in 100 years, when similar tariffs had caused global recession, cost millions of jobs and contributed to the start of the second world war.

Baranowski, who is chairing talks between EU trade ministers in Luxembourg, said he hoped that the EU could have “serious negotiations as soon as possible” with the US.