MONEY MATTERS
Trump’s tariff u-turn sparks world-wide relief… but what’s the REAL impact on your cash? Everything you need to know
Trump last night admitted that his pivot was because markets 'were getting yippy'
"THIS is a great time to buy" President Donald Trump posted on his Truth Social account on Wednesday afternoon as stock markets were in a heavy sell-off.
People who followed his advice and bought shares would now be sitting on big profits because just four hours later he sparked the mother of all market bouncebacks.
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After days of market turmoil he announced he would be pausing his "reciprocal" tariffs everywhere and imposing instead a 10 per cent rate tariff on goods into the US for all countries, except China.
He has ramped China's tariff up to 125 per cent in an escalating all-out trade war.
Trump's decision instantly sparked a euphoric reaction in markets, largely driven by relief.
Investors had been increasingly nervous about warnings that his punishing tariffs on countries like Vietnam and Taiwan - which import billions of dollars of goods such as trainers for Nike and computer chips for tech giants - would upend the economy.
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As US government bond prices started getting punished, some of Trump's biggest supporters on Wall Street publicly urged the President to act and put in a rational pause.
Trump last night admitted that his pivot was because markets "were getting yippy".
The pause sparked the biggest rally on financial markets since 2008, with more than $7trillion added to US exchanges.
The Nasdaq soared by 12 per cent, the Down Jones bounced up by 7.87 per cent and the S&P 500 jumped by 9.52 per cent.
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This continued in Asia with Japan's Nikkei up by 9.13 per cent, South Korea's KOSPI up 6.6 per cent on the back of relief that there would be lower tariffs.
In Shanghai trading was more subdued, up 1.31 per cent.
Trump confirms 90-day tariffs pause after EU revenge tax but singles out 'disrespectful' China with new 125% hike
In London the FTSE 100 lifted by 4.53 per cent to 8,027.25 in morning trading, its biggest jump since 2020.
In Germany the DAX rose by 5.8 per cent and in Paris the CAC 40 is up by 5.49 per cent.
The big question is for how long.
Michael Field, chief equity strategist at Morningstar noted: "The news of Trump backing down from tariffs is a big positive for markets, with many saying that the worst case scenario is now off the table.
Billionaire pals' pain
A BILLIONAIRE boys' club suffered a bloodbath prior to Trump's tariff pause — heaping pressure on the President to change course:
JEFF BEZOS: Worth $196bn. Lost $43bn.
China drives huge volumes of business to Amazon. Its cloud services business relies on tech from tariff-hit Taiwan.
ELON MUSK: Worth $298bn. Lost $135bn.
A consumer backlash has dented sales of his Tesla cars, which also rely heavily on Chinese parts.
MARK ZUCKERBERG: Worth $183bn. Lost $25bn.
Meta stock has slumped by 15 per cent this year.
BERNARD ARNAULT: Worth $150bn. Lost $26bn.
His Louis Vuitton brand relies on wealthy shoppers in the US and China.
"But the overhang of the trade war is likely to persist for some time.”
So what's the real impact on your cash.
Mortgage
Amid jitters about the health of the economy, traders had been predicting a Bank of England rate cut from the current 4.5 per cent in May, with more to follow later in the year.
High street banks had already gearing up for a mortgage price war with TSB reducing two-year fixed mortgage rates by up to 0.25 per cent yesterday.
Coventry dropped its rates below 4 per cent on Wednesday.
Brokers predict that mortgage rates could fall as low as 3.79 per cent on the back of rate cuts, which will save homebuyers thousands of pounds.
Pension funds
It's been a tough time to check your pension pot, given the recent pounding on the stock market.
For people in the public sector and with defined benefit pension schemes, there is little need to worry because these are conservatively managed.
Boom and gloom
HERE'S some of the ways the trade war will affect you.
FUEL PRICES: With wholesale prices tumbling, the RAC predicts petrol and diesel will fall by up to 6p a litre within a couple of weeks.
The bad news is this is only because traders think a recession will affect demand.
MORTGAGES: Brokers forecast a Bank of England rate cut from the current 4.5 per cent in May.
Loan rates could fall as low as 3.79 per cent, saving homebuyers thousands.
High street banks are already gearing up for a price war, with TSB reducing two-year fixed mortgage rates by up to 0.25 per cent yesterday.
PENSION FUNDS: Those with defined benefit pension schemes ought not to worry as they are managed conservatively.
Others should ensure pensions are invested in a mix of assets, including bonds — and not stuffed with plunging US stocks.
COST OF GOODS: Some imports could become cheaper as companies in countries hammered by Trump give the US a miss.
But that will hurt British manufacturers if we are flooded with cut-price products.
If you are close to retiring it is worth checking your pension has invested in a mix of assets, including bonds, and isn't just stuffed with US stocks which have been very volatile.
While the stock markets have bounced back, the FTSE 100 hasn't rallied enough so far to recover losses.
Cost of goods
Some goods could become cheaper for Brits as companies in Asia and other countries hammered by Trump tariffs divert their wares from the US to the UK in order to avoid tariffs.
However, this could be a short-term win. But if China floods Britain with cheap products that end up destroying homegrown British manufacturers.
There is also the risk that companies - such as Apple - try to recover the extra costs of supply chain snags simply by hiking their prices all around the world.
Job prospects
A global trade war are expected to weaken the UK's economic growth and squeeze companies' profits.
The budget watchdog and economists have slashed forecasts for this year.
As a result companies will be most likely to make cutbacks to heir work forces.
Read More on The Sun
Trump's 25 per cent tariffs on the car sector - which still stands - could threaten 25,000 jobs alone, a thinktank has warned.
UK firms are already weakened by the Government's National Insurance rise, which kicked in this week.
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