{"id":132806,"date":"2025-04-07T10:16:01","date_gmt":"2025-04-07T10:16:01","guid":{"rendered":"https:\/\/quixnet.net\/wpinstance\/trump-tariffs-latest-musk-shares-video-about-magic-of-free-market-as-uk-stock-market-suffers-sky-news\/"},"modified":"2025-04-07T10:16:01","modified_gmt":"2025-04-07T10:16:01","slug":"trump-tariffs-latest-musk-shares-video-about-magic-of-free-market-as-uk-stock-market-suffers-sky-news","status":"publish","type":"post","link":"https:\/\/quixnet.net\/wpinstance\/trump-tariffs-latest-musk-shares-video-about-magic-of-free-market-as-uk-stock-market-suffers-sky-news\/","title":{"rendered":"Trump tariffs latest: Musk shares video about 'magic' of free market – as UK stock market suffers – Sky News"},"content":{"rendered":"

UK markets have fallen sharply again this morning, following the trend of Asian stocks overnight. Earlier, Donald Trump insisted the trade war is “medicine” for the US economy – but has ally Elon Musk broken ranks to disagree with him? Listen to Trump 100 as you scroll.
Monday 7 April 2025 11:08, UK
More movements now from elsewhere in the world, this time in South Africa – where the currency has fallen to its weakest point in more than a year.
At about 9.15am UK time, the rand was down 1.5% against the dollar, touching its lowest level since October 2023.
The rand is highly sensitive to risk and tends to be dropped at times of global market uncertainty, as is the case following Donald Trump’s tariff package.
Another factor behind the rand’s recent fall – it lost more than 3% against the dollar last week – is domestic politics, with the two biggest political parties in government clashing over the national budget.
As we reported earlier, investors are turning to what they consider to be safe-haven currencies – see 10.45am.
By Ed Conway<\/a>, economics and data editor<\/b>
Of course, this is dramatic. Of course, markets are slumping.
Because if you take Donald Trump at his word (something investors are now finally beginning to do), he is attempting single-handedly to reverse and uproot decades worth of economic history in the space of a few months.
Because if this really is “the end of globalisation”, as a few politicians, including Keir Starmer, are now calling it, it constitutes one of the most wrenching, painful episodes in modern times.
Your phone is the perfect example<\/b>
To see what I mean, the best place to begin is by pondering the hidden life of the device you’re reading this on. I’m assuming it’s a smartphone, specifically the latest iPhone, but most of the following applies for other smartphones, and indeed many laptops or desktop computers.
The display was made in South Korea or Japan. The camera module was made by Sony in Japan (who have a particular expertise in this type of specialised silicon that few other companies have been able to match). The batteries (for the latest iPhone at least) are made in India, though these days the vast majority of the world’s cells are made in China.
On it goes – the memory chips are from South Korea, which has a near monopoly on solid state storage silicon. The logic chips – the ones that help the device “think”, are made in Taiwan, albeit with IP from all over the world, including America and even Britain. 
Some of the chips do indeed come from the US – in particular the modem, though the company behind them (Qualcomm) sometimes manufactures in Taiwan. But there are some from Europe too – most notably the spatial sensor chips that come from Bosch in Germany.
The US digger reliant on British steel<\/b>
If you are looking for an example of “globalisation”, you couldn\u2019t do much better than the smartphone. 
But even this potted geography lesson understates it because those fabrication plants in Taiwan and South Korea, turning out those silicon chips that help the phone think and remember stuff, are totally dependent on machines made by a company called ASML, based in the Netherlands. 
Those Dutch machines, in turn, contain components from hundreds of other companies around the world, including in Germany and the US. On it goes.
Nor is this degree of interconnectedness solely to be found in high-tech equipment. 
The other day, I was up in Scunthorpe at the blast furnaces of British Steel. It turns out the iron they smelt there doesn’t just go into the rails that striate this country. They also make the steel that goes into the tracks of Caterpillar trucks.
That\u2019s right: the iconic tracked diggers – for many people the most American of all things – are all mounted on steel “track shoes” made in the North East of England.
‘Made in China’ an enormous over-simplification<\/b>
The further you look around the world of manufactured products, the more you realise that nearly everything you touch on a daily basis has, in the months before it arrived in your life, been on a long trip from factory to factory, taking it all around the world. That device you’re reading this on may say “made in China” on the back, but that’s an enormous over-simplification. It was made more or less everywhere.
This is the way the world works today – like it or not. In a sense it’s the ultimate extension of what Adam Smith discussed back in the earliest days of economics, when he described a “pin factory” where the work of making a simple pin was divided up between different people, with each worker specialising in a particular task rather than trying to make the whole pin themselves.
Today we have a sort of international division of labour. Today, nearly everyone goes to China to get their batteries. They go to South Korea to get their memory chips. The upshot is these factories have become ever more efficient at making their products. And – here\u2019s where it matters for the rest of us – the price of making and buying this stuff goes down.
Watch below from 2 April: Conway with the key things you need to know after Trump’s tariffs reveal.<\/i><\/b>
Today the reason one can buy what would once have been classified as a supercomputer for a few hundred pounds is because of this division of labour. Globalisation made everything, from computers to Caterpillar trucks to T-shirts, that bit cheaper than they would have been had we attempted to manufacture them all in a single country.
But the ugly side of this economic shift is that those regions that used to do the manufacturing – be it the “rust belt” of America or the Midlands and North East of England – have seen much of their traditional work disappear. And while economists have insisted that cheaper products make everyone better off in net terms, the reality is that these parts of our countries haven’t got better off. They have been hollowed out. 
And in time, resentment about globalisation has built up – for good reason.
This is the world we inhabit today. Unpicking it will be phenomenally difficult and phenomenally expensive. 
Watch more of Ed Conway’s reporting below – last week, he was in North East England with exclusive access, looking at the end of British steel as we know it.<\/i><\/b>
Trump’s Rose Garden speech will reverberate for long time<\/b>
Trying to relocate all those functions – factories and labour markets with expertise that has built up over decades – would be incredibly difficult and would take a long time. 
But that seems, as far as anyone can tell, to be the aspiration of Donald Trump. That appears to be the objective of his tariff policy.
Up until now, most investors had assumed that the president wasn’t entirely serious about this – that he merely intended to scare a few Asian companies into opening factories in key swing states. And who knows – that may well turn out to be the case. But he certainly seems more serious this time around – and less phased by the negative market reaction.
In the meantime, we are left with those tariffs.
Think back to that iPhone. Think back to those Caterpillar tracks. All those components now face tariffs when they arrive in the US. That will push up the cost of buying pretty much anything in the US, and will accordingly push down the demand for those goods. 
And since America is the world’s consumer of last resort – the biggest importer of goods anywhere – that has an enormous bearing on demand around the world. 
So, yes, of course, this is dramatic. Of course, markets are slumping. No one knows what the US president will do next. 
Either way, what happened last week in the Rose Garden will reverberate for a long time to come.
Watch below: The moment Trump unveiled his consequential tariffs chart.<\/i><\/b>
Donald Trump’s billionaire backer and ally heading up a team for “government efficiency” may have broken ranks on social media.
Elon Musk has shared a video – posted by another user – extolling the benefits of free markets and complex supply chains.
Using the example of a pencil, US economist Milton Friedman explained how different stages in different parts of the world contributed to its creation.
“Literally thousands of people cooperated to make this pencil,” Friedman, who died almost 20 years ago, said.
It’s the “magic of the price system”, he added, and “that is why the operation of the free market is so essential”.
“Not only to promote productive efficiency, but even more, to foster harmony and peace, among the peoples of the world,” he said.
More investors are turning to the Japanese yen and Swiss franc, as the dollar’s status as a safe haven erodes in the eyes of markets.
Today, the risk-sensitive Australian and New Zealand dollars, as well as the Swedish and Norwegian crowns, all fell against the dollar.
But, in turn, the dollar fell 0.75% against the yen, following a 1.4% fall earlier during trading hours.
Against the Swiss franc, the dollar fell 1.15%.
Both currencies have emerged as significant winners in the aftermath of Donald Trump’s tariff package.
While the dollar is typically known to be a safe haven asset, its status appears to be falling as uncertainty grows over tariffs.
By Darren McCaffrey, Sky News presenter<\/b>
It’s a complete bloodbath, traders told me this morning, with the FTSE 100 joining indexes around the world in turning red as Donald Trump’s tariff uncertainty continues to batter stock markets.
Across Asia and Europe, hundreds of billions have been wiped off the value of companies, particularly in banking and manufacturing.
The cause itself is not just the imposition of those tariffs, the largest the United States has inflicted since the 1930s, and the very obvious drag this will have on global trade and growth – but also the uncertainty of what comes next.
Investors cannot work out whether the Trump administration is genuinely wedded to tariffs on this scale on the proviso that it will help reshore millions of jobs and companies to the United States. 
Are they really permanent? Or are they merely part of a negotiation tactic to address trade imbalances and for America to use its economic heft to strike better deals?
If President Trump is open to deals (the first test comes later in a meeting with the Israeli prime minister), markets will calm – even if the uncertainty hasn’t fully cleared.
However, if this is a genuine rewiring of global trade and the end of globalisation as we know it, markets and economies will continue to get battered.
As one Trump supporter, billionaire Bill Ackman, who opposes the tariffs, put it, Trump has launched a “global economic war against the whole world” that will usher in an “economic nuclear winter”.
It’s time for all of us to buckle up. 
Watch McCaffrey reporting from the City at 11.30am on Sky News’ Business Live.<\/b>
Taiwan will not hit back at the US over its hefty tariff.
President Lai Ching-te has said he won’t retaliate against the 32% rate Donald Trump imposed last week.
“Taiwan has no plans to adopt retaliatory tariffs,” Lai said during a recorded speech yesterday.
Instead, he said, Taiwan will import more US good and expand its investments in the country.
He added the two countries can talk about zero-tariff treatment working both ways.
He also referred to the island’s resilience and the fact its exports to the US valued more than $110bn last year.
“Working together, we’ll usher in a golden age of shared prosperity,” Lai wrote in a post on social media today.
Taiwan shares have dropped by more than 9% to hit a one-year low, according to CNBC, with stocks of the island’s top chipmaker TSMC falling nearly 10%.
Washington has no official relations with Taiwan, but is the island’s most important international backer in the face of Chinese threats to “unify” it with the country.
How bad is this economic shock? And will it last?
A number of experts have been speaking to the Reuters news agency about the ongoing economic fallout.
Here are a few of their summaries of the current situation.
‘Many investors are fearing the worst-case scenario’<\/b>
Angelo Kourkafas, senior investment strategist at Edward Jones in St Louis, says: “Fear is what continues to drive market action since the 2 April tariff announcement. 
“I think many investors are fearing the worst-case scenario of a prolonged trade war. 
“Until we get an off-ramp and some indication that we potentially are pivoting to cutting deals to lower tariffs, that sentiment will remain fragile.”
Economic shock will be remembered in 20 years<\/b>
Tim Graf, head of EMEA Macro Strategy with State Street in London, thinks: “We’re in the territory where this will be a named event when people write about things in 10 or 20 years time.”
He adds two things are making the fallout worse.
First, there’s an element of herd mentality.
“Even though individual actors in markets think they are doing the rational thing, when they all do the same thing at the same time, it becomes a bit irrational on the surface, a sort of tragedy of the commons.”
Secondly, Trump’s stubbornness is playing a part. 
“There is an intransigence element that will come to the fore because these guys don’t sound like they are going to change their minds,” Graf adds.
‘Rationality should prevail’<\/b>
Dean Fergie, director of Cyan Investment Management in Melbourne, says: “I expect a lot of panic selling this morning but over the coming days some level of rationality should prevail and we’ll see some buying support come in. 
“The sectors to watch will be the financials\/fund managers impacted by global market weakness, and the global discretionary stocks.”
‘Volatility likely to stay elevated’<\/b>
Charu Chanana, chief investment strategist at Saxo, in Singapore, thinks “the lack of any policy response from the Trump administration on the market sell-off is adding to the uncertainty, reinforcing the idea that the current trajectory may remain unchanged in the near term”. 
“Unless we see a clear pivot from policymakers, volatility is likely to stay elevated, and the path of least resistance for risk assets remains to the downside,” she adds.
By Sarah Taaffe-Maguire<\/a>, business and economics reporter<\/b>
If there was an expectation of shallower market falls today, the performance of Asia’s indexes well and truly dispelled the idea this morning with shocking drops.
Hong Kong’s Hang Seng Index lost the most of all regional neighbours, recording a stunning 13.22% drop, the largest since the financial crisis.
It’s a sign that contrasts with more recent sharp falls may now be redundant. Rather than looking to the early days of COVID-19 lockdowns, we could have to look beyond the last five years to draw accurate comparisons.
China’s Shenzen Stock Exchange closed just shy of 10% down while Taiwan’s index lost 9.7%. 
With Chinese markets closed on Friday, clearly a catch-up is occurring. 
Donald Tusk has shared a brief message about the ongoing tariffs fallout.
He described the reaction to Donald Trump’s reveal last week as a “stock market earthquake” in a post on X.
But this “must be survived without nervous decisions”, he warned.
“The Polish stock market also got a ricochet, but political and economic stability are our assets in this difficult time,” he added.
“We will persevere calmly.”
On Day 78, our US correspondent Mark Stone<\/b><\/a> is joined by the UK’s former ambassador to the US, Sir Nigel Sheinwald.
He served from October 2007 to January 2012 and has dealt with both Republican and Democrat administrations.
In this episode, the pair discuss whether Sir Keir Starmer has taken the right approach with Donald Trump – and if it’s now time to crank up the tone.
Sir Nigel also reflects on Peter Mandelson’s appointment as the ambassador to guide the UK through Trump’s second term in office.
If you’ve got a question you’d like Mark, Martha, and James to answer, you can email it to trump100@sky.uk<\/a>. 
You can also watch all episodes on our YouTube channel<\/a> – or follow Trump 100 here<\/a> wherever you enjoy your podcasts.
Be the first to get Breaking News<\/span>
Install the Sky News app for free<\/p>\n

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