UK stocks rebounded this morning as markets regained a measure of calm following several days of heavy losses triggered by former US President Donald Trump’s sweeping tariff threats.
The FTSE 100 rose more than 1% in early trading, with all other major indexes on the London Stock Exchange also in positive territory. The gains follow a more optimistic session across Asian markets overnight, as investors began to digest the potential long-term impact of a brewing global trade war.
Market turbulence was set off last week after Trump unveiled a dramatic escalation of tariffs, targeting Chinese imports with proposed levies exceeding 100%, despite warnings from allies and economists that such a move could ignite a full-blown economic conflict.
In a swift response, Beijing announced it would impose its own 34% levy on imports of American goods, raising the specter of tit-for-tat trade measures reminiscent of earlier US-China confrontations. Should both sets of tariffs take effect, the combined duty rate on Chinese goods could climb to 104% — a potentially devastating blow to global supply chains and financial markets.
Markets in London had been roiled by fears of collateral damage from the US-China standoff, particularly after Trump also slapped a 10% tariff on UK exports to the US — despite the countries’ close historic ties.
Britons Back Tariff Retaliation
Meanwhile, a new poll shows that more than half of UK voters support retaliatory tariffs on US goods entering Britain, placing pressure on Labour leader Sir Keir Starmer, whose government has so far resisted matching Trump’s levies.
The survey, conducted by More in Common, found that a majority of respondents disagreed with Starmer’s approach of seeking a diplomatic resolution to the tariff row, instead favoring a stronger stance to defend British exports and manufacturing jobs.
The Prime Minister is expected to face renewed calls in Parliament this week to impose mirror tariffs in response to Trump’s aggressive protectionism, as opposition MPs accuse him of being too passive in defending UK trade interests.
Global Markets Watch Wall Street Opening
Investors are now closely watching the US, with Wall Street set to open at 2:30 p.m. UK time. Analysts predict continued volatility amid uncertainty over whether the Trump administration will further escalate its trade war or respond to growing international backlash.
While the UK market bounce offers a brief reprieve, analysts warn that long-term risks remain elevated, especially if trade tensions spread to other sectors or allies such as the European Union join the fray with retaliatory measures.