US President Donald Trump's tariff bombshell wipes £2TRILLION off global stock markets

Up to £2trillion was wiped off global stock markets as ’s tariff bombshell sparked fears of a . Shares plunged around the as spooked investors digested the sheer scale of the President’s higher-than-expected levies on US imports.

Wall Street was a sea of red as US markets opened for the first time since the minimum 10% tariff were unveiled late on Wednesday. The benchmark S&P 500 index slumped more than 4% in early trading, wiping £1.5trillion from the value of America’s biggest companies. It came as the FTSE All World index, a measures of stock markets globally, lost around £2trillion.

To put that into context, the UK’s entire annual gross domestic product - the size of our of economy - is just over £2.5trillion. The sell-off in the States was heavier than the Europe. Nevertheless, the UK’s FTSE 100 dived 1.55%, or more than 133 points, to close at 8474 - and the biggest one day fall since last August, when markets was hit by previous concerns of a US recession.

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Olu Sonola, head of US economic research at ratings agency Fitch, warned: “Many countries will likely end up in a recession. You can throw most forecasts out the door if this tariff rate stays on for an extended period of time.”

Advisory firm Oxford Economics slashed its forecast for UK growth next year from 1.5% to nearer 1%. Andrew Goodwin, its chief UK economist, said: “As things stand, it looks likely that the OBR (Office for Responsibility) will judge the government will miss its fiscal rules when it next updates its forecasts in the autumn.”

Investors fear a full-blown trade war could trigger a sharp global economic slowdown and drive up inflation, with the world barely recovering from a post-pandemic price surge.

Nigel Green, chief executive of global financial advisory deVere Group, said of the tariffs: “This is how you sabotage the world’s economic engine while claiming to supercharge it.”

Dr Eric Golson, associate professor of economics at the University of Surrey, said: “Lower tariffs were the result of a series of compromises on trade, intellectual property and services in the 1990s. Undoing the trade compromises risk spilling over from trade to full-scale economic warfare.”

In the US, the Nasdaq was down more than 5%, with technology-related shares among the day’s biggest fallers.

Apple fell 8.5%, hit by the tariffs on - where much of its gadgets are made. Amazon, Microsoft and microchip giant Nvidia also fell.

President Trump’s vow to use tariffs to browbeat firms into shifting production to States had one success, after Swedish car maker Volvo announced plans to increase output in the US. It comes after the White House unveiled 25% tariffs on car imports.

Danni Hewson, head of financial analysis at broker AJ Bell, said: “Donald Trump might be able to write off some of today’s commentary as hyperbole but even he can’t ignore the numbers.

"For a President who used to use Wall Street as his own personal scorecard, today’s market assessment of his tariff plans has been damning.

“Comparisons will be made to 2020’s global pandemic and 2008’s financial crash, but looking forward we must consider that ‘Liberation’ may ultimately end in recession."