The shares of Apple were among brands worst hit after US tariffs were announced, but President Trump maintained the American economy would ultimately "boom". Also: release date of Nintendo Switch 2 console revealed.
Chapter 1: What triggered the steep drop in US stocks?
This is the Global News Podcast from the BBC World Service. I'm Nick Miles, and in the early hours of Friday, the 4th of April, these are our main stories. President Trump has said his policy of putting steep tariffs on US imports is going very well, despite huge falls in stock markets. The new taxes have led the World Trade Organization to revise down its growth forecast.
It now expects the global economy to shrink by 1% this year. The authorities in Gaza say an Israeli airstrike has killed over 30 displaced people sheltering in a school.
Also in this podcast. This is absolutely a transformation. I don't think people were really expecting 4K for a start. The screen 1080p, like this is really big upgrades that people weren't necessarily expecting going into it.
The Japanese gaming company Nintendo has revealed the Switch 2, the long-awaited successor to one of the best-selling consoles in history. Donald Trump has defended the tariffs he's announced on US imports from around the world, despite a global stock market sell-off. Wall Street suffered one of its worst days in recent years on Thursday.
But speaking to reporters as he left the White House, Mr Trump expressed optimism.
I think it's going very well. It was an operation like when a patient gets operated on, and it's a big thing. I said this would exactly be the way it is. We have $6 or $7 trillion coming into our country, and we've never seen anything like it. The markets are going to boom. The stock is going to boom. The country is going to boom.
We'll hear more about what the US president had to say in a moment, but let's hear from India, Vietnam, Japan and South Africa. And first, from the US.
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Chapter 2: How do Trump's tariffs affect global trade?
We're a small independent company that's been in business in Michigan, USA for 67 years. A lot of our parts that come in there are made of steel. So we've already been hit with the steel tariffs. But I think what was frightening today is that some of our components that come in, come in through Taiwan, and now there's a 32% tariff on Taiwan.
So in effect, when you couple the 32% with that 25% steel tariff, we could very well be looking at 57% tariff.
Chapter 3: What is the impact of tariffs on US businesses?
90% of our business is imported coming from LATAM countries. So most of the countries that we operate are going to be a 10% tariff. Food is already retailing at a ridiculously high price. And big box stores such as Costco, Walmart, I don't know how much more they can pass on these tariffs to the consumer. So in the end, it's going to come off our bottom line.
I understand what President Trump is trying to do. He's trying to bring back agriculture, food production, which has been very important. I think around the world, people have seen since COVID how we are so interconnected as a global economy.
More than 60% of business comes from the US alone. So this is a big setback. Already there were a lot of challenges in terms of pricing. Our customers were finding it difficult to sell at large scale. So reducing price is an option, but we will have to shrink our margins also. This is very labor-intense business, textile and garment making.
Something has to be done so that sectors like us should be incentivized to remain competitive.
Many people in Vietnam were so optimistic about the prospect that Trump will be lenient towards Vietnam because... The Vietnamese government has done so much to appease Trump and his administration. The thing is, so many U.S. companies have set up their factories in Vietnam to produce exactly for the U.S. market. So that is going to add on to their prices as well.
Most of the order companies are more or less global, so the supply chain is going to be disrupted. But I'm confident that the manufacturers in Japan are pretty innovative. So that may become a very good opportunity for the Japanese companies to get innovative in a rather interesting way.
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Chapter 4: How are different countries responding to US tariffs?
In South Africa, there's significantly higher imports of automotive components from the U.S. versus the number going into the U.S. in terms of exports. So the sector we're really concerned and our priority is to look to try and find a mutually beneficial way of maintaining the U.S. as the key trade partner for the South African economy.
By one estimate, more than $1.5 trillion was wiped off the value of shares on Wall Street at the start of Thursday's trading. Shares in tech firms were the worst hit. Apple's value dropped by more than $250 billion. The dollar also fell and there's been a slide in oil prices. Investors fear the tariffs will hit growth and drive up inflation worldwide.
Despite all this, President Trump remained buoyant. I heard more from our North America correspondent, David Willis.
It was a fairly wide-ranging conversation, Nick, on that flight to his Florida home, and Donald Trump conceded that there was going to be what he called... a transition period whilst some trading partners transferred their manufacturing operations to the United States. He stressed that for companies that chose to make their products here in the U.S., there will be no tariffs, of course.
And he said that he'd already spoken to two of the five major automobile makers and maintained that they had already started moving aspects of their operations out there. of neighbors Canada and Mexico and into the U.S. Yet for all of his confidence, it's worth remembering that Donald Trump has long hailed the stock market as the barometer of this country's economic health.
And I think much as he may pretend otherwise, he won't be pleased to see the sort of sharp falls that we've seen today. As you mentioned, both the Nasdaq and the S&P experienced their worst declines in about five years. Retailers, tech companies taking a particularly bad hit, both Apple and Amazon down more than 9%. Companies like Dell and Ralph Lauren experiencing falls of more than 15%.
And David, in that clip we heard from Mr. Trump, he referred to what's happening as an operation that's going to work. To what extent do Americans like the idea of being operated on?
Well, I think like people in many other parts of the world, Nick, American consumers are holding their breath, if I can put it that way. They are waiting to see what all this means in terms of the price of goods in the shops.
The stock market, of course, is not the economy, but the reaction that we've seen today is nonetheless an early, some would say visceral demonstration of the sort of widespread and growing concern that exists here today. over rising prices, the prospect of rising prices, the prospect of slowing growth, and, of course, the prospect of a recession.
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Chapter 5: What is the economic outlook after the tariff announcements?
As one analyst here put it, traders are shooting first, Nick, and asking questions later.
And no sign of any kind of dissent within the Trump administration, far from it at the moment.
Far from it. Although I think the closest we've come to that is perhaps some Republicans who voted in favor of a Democrat led measure in the Senate to prevent the tariffs being introduced on Canada. But that was then both for Republican candidates. senators.
It's a small protest, but it does underline the fact, I think, Nick, that there is concern at grassroots level to an extent, at least, over what these tariffs could mean for industries here in the US, such as farming.
David Willis in Los Angeles. The World Trade Organization has revised its forecast for global economic growth sharply downwards in the light of the new US tariffs. In contrast to its previous forecast of 3% growth for the world economy this year, the agency now expects a contraction of 1%. Jonathan Josephs reports.
The drastic scale of this reduction underlines that these U.S. tariffs pose the biggest challenge to the global trading system since the World Trade Organization began drawing up and enforcing the rules 30 years ago. The Director General, Ngozi Okonjo-Iweala, says the tariffs will have substantial implications for global trade and economic growth prospects.
She added she was deeply concerned about escalation and retaliatory measures, which have already started, making things even worse.
Jonathan Josephs. Well, many people around the world see Donald Trump's tariffs as the moment the post-war system of global trade was turned on its head. So are they right? Our business correspondent Mark Ashdown gave me his assessment.
Look, in terms of trade tariffs, we haven't seen anything like this since probably the 1930s. An escalating scale of universal tariffs, anything from 10%, for the ones that got off most lightly, up to 50% or so. And this all depends on what Donald Trump sees as the level of trade deficit. In his words, how much America's been ripped off over the years. He wants to level that playing field.
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Chapter 6: What challenges does Bangladesh face with new tariffs?
Chapter 7: How is Lesotho affected by US tariffs?
They've promised strong responses to this. In the UK, they've talked about a calm and considered approach, but even here they've published this afternoon this 417-page list of US goods. Potentially they could put tariffs on, so strengthening of their position there. But as I say, they are going to try and hope they can come up with a deal. Mark Ashdown.
The Southern African nation of Lesotho says it will send a government delegation to the United States to plead its case after Washington imposed 50% tariffs on its imports. Thousands of people in Lesotho are employed making clothes for the US market under a tax-free initiative set up more than two decades ago. Our Africa regional editor, Will Ross, reports.
The owner of a clothing factory in the capital of Lesotho, Maseru, said waking up to news of the 50% tariff had been devastating for the country, but said he'd look for markets in Africa and Europe. Across Africa, tens of thousands of workers produce clothing for the US under a tax-free initiative known as AGOA. It was partly set up to help countries trade their way out of poverty.
Now Lesotho's government is warning of job losses. Botswana faces a 38% tariff on its exports because Donald Trump wants to get rid of a trade deficit. But that won't be easy. Botswana has diamonds.
Well, Ross, there's more concern in Asia as well to these tariffs. Bangladesh was number 16 on President Trump's tariff list, which was shown to the invited guests on the White House lawn. The South Asian country now has a 37% tax levied on its imports into the US.
Bangladesh's economy has grown in recent years and it's scheduled at the end of next year to graduate from the UN's Group of Least Developed Countries, or LDC, status. But it's still vulnerable, as Tim Franks has been hearing from Salim Rehan, Professor of Economics at the University of Dhaka.
This has created a lot of tension among the business community as well as among the policymakers. And it's not only about, you know, that the tariff is not only imposed on Bangladesh, but also quite a lot of countries, with which Bangladesh competes in the U.S. market.
The problem is Bangladeshi exporters, they face a lot of challenges at home because of the business environment or there is a high cost of doing business and various other challenges is there for the exporters. Now, this additional pressure coming from U.S., especially with respect to this reciprocal tariff, that has created a lot of tensions and a lot of worriness, I can tell you.
How much does Bangladesh export to the United States? I mean, how important a market is it?
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