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Gold surpasses $3,300 for first time as Trump trade war deepens

The value of Ireland’s exports to the US soared more than 200pc year on year in February, according to the country’s statistics office. 

Exports increased by €8.75bn (£7.5bn) to €12.9bn (£11bn), with medical and pharmaceutical items accounting for 91pc of that total. 

The jump followed an 81pc uplift in January, as US drugmakers continue to stockpile products from Irish manufacturing hubs amid the uncertainty brought on by the Trump administration’s trade policy. 

Donald Trump has advanced plans to impose tariffs on semiconductor and pharmaceutical imports by initiating trade probes led by the Commerce Department.

Buoyed by relatively low tax rates and a skilled workforce, Ireland has become an attractive destination for US pharmaceutical companies seeking to outsource elements of the production chain. 

Ireland has amassed the second-largest trade surplus with the US of the EU nations, exporting a record €72.6bn in 2024, up 34pc from the previous year.

Speaking alongside Taoiseach (Irish prime minister) Micheál Martin at the Oval Office last month, Mr Trump said: “There’s a massive deficit that we have with Ireland... we want to sort of even that out as nicely as we can, and we’ll work together.”

Simon Harris, Ireland’s trade minister, said on Tuesday that the pharmaceutical sector was “more complex” than it has often been presented. 

He told Bloomberg: “About 80pc of what US pharma companies export back to the US from Ireland is not the finished product, it goes into American factories, it creates jobs for American workers.”

Inflation will gather pace in April as energy and water bill hikes push prices higher, an economist has warned. 

Sanjay Raja of Deutsche Bank said policymakers could take solace in the lower than expected inflation for March, which came in at 2.6pc.

However, he said prices would rise again, even before any impact from US tariffs, although this would remain below the Bank’s second quarter forecast.

He said: “Inflation will take a big step up in April, pushing above 3.25pc as energy and water bills lead inflation higher.” 

Mr Raja expects inflation to return to target by the middle of next year, as the Bank of England loosens the taps on the back of yesterday’s weak labour market data and today’s softer inflation score. 

Inflation slowed to 2.6pc, according to the Office for National Statistics, down from 2.8pc in February and paving the way for interest rate cuts next month. 

He said the index had been weighed down by weaker price rises for goods such as smart watches, communication equipment, musical instruments, pizza and quiches, as well as recreational services, accommodation prices and transport prices.

Eurozone inflation fell last month, official data confirmed, all but confirming that the European Central Bank (ECB) will cut interest rates tomorrow.

The consumer prices index dropped from 2.3pc in February to 2.2pc, according to Eurostat.

Money markets indicate there is a 98pc chance that the ECB will reduce borrowing costs again to 2.25pc as the European economy prepares for a hit from US tariffs.

European investors are four times more exposed to US assets than they were in 2010, an economist has said, outlining the risks faced by consumers from downturns on Wall Street.

George Saravelos of Deutsche Bank said foreigners now own around $7 trillion (£5.3 trillion) of American fixed income and $18 trillion (£13.6 trillion) of American stocks.

Since 2010, ownership has risen by $3 trillion in bonds and $15 trillion in equities, with a “remarkable” 90pc accounted for by the appreciation in underlying US asset values rather than fresh flows.

The total share of total US portfolio holdings has quadrupled in Europe, from around 5pc in 2010 to 20pc in 2024, while in Japan, it has doubled from 8pc to around 16pc.

Mr Saravelos said: “The more benign interpretation of our analysis is that foreigners have merely passively tracked rising aggregate valuations of US equities and issuance of US bonds. 

“The more worrying interpretation is that this has left foreigners - especially Europeans - with a huge overweight in their portfolios relative to history, especially in US equity markets which tend to be currency unhedged.”

The pound gained as the dollar remained under pressure over concerns about the US economy.

Sterling was up 0.4pc to $1.328 despite money markets pricing in an interest rate cut by the Bank of England next month as official figures showed inflation fell further than expected to 2.6pc last month.

The pound slipped 0.4pc against the euro, which was worth 85.6p.

Donald Trump is seeking to agree swift trade deals with a number of countries in an effort to isolate China, economists have said a day after JD Vance indicated there was a “good chance” of a UK-US agreement.

The US president has indicated about 75 countries have indicated willingness to hold trade negotiations with his administration after he opted to pause his “reciprocal” tariffs for 90 days against all countries but China.

Mohit Kumar, chief Europe economist at investment bank Jefferies, said the US cannot win a tariff battle with China but suggested it could secure “more favourable terms” before backing down if it is successful in isolating Beijing.

He said he expects trade deals to be struck with a majority of the 75 countries holding talks within the 90 day reprieve period. 

The most important of these would be Japan, South Korea, India and the UK, although he said “negotiations with the EU will prove more tricky”.

He said: “In the near term, we see US administration objective function as trying to score easy wins by agreeing to deals with a number of countries, while trying to isolate China.”

European shares slipped as Nvidia said it would take a $5.5bn hit from new US export restrictions to China, raising concerns about corporate profits.

The pan-European Stoxx 600 index fell 0.7pc, after two days of gains although market moves were tamer compared to a week ago.

Nvidia shares dropped 6.3pc in after-market trading in New York as it said its first quarter results would be hampered by new export controls imposed on its H20 chip, which can be used to power artificial intelligence.

Adding to tech woes, ASML, the world’s biggest supplier of computer chip-making equipment, warned that tariffs were increasing uncertainty for its outlook for 2025 and 2026, sending its shares 7.4pc lower.

Germany’s Dax index fell 0.9pc and France’s Cac 40 fell 0.8pc. The FTSE 100, which has limited exposure to tech stocks, was less severely hit, down 0.3pc.

The FTSE 100 fell at the open as the US raised further barriers to global trade as it limited exports of Nvidia chips to China. 

The UK’s flagship stock index was down 0.3pc to 8,228.88 while the midcap FTSE 250 dropped 0.4pc to 19,188.75.

Gold rose to a fresh high amid the escalating trade war between the world’s two largest economies.

Bullion gained as much as 2.4pc to climb above $3,297 an ounce for the first time, surpassing the previous all-time peak set on Monday. 

The precious metal has climbed more than 20pc this year and hit a series of record highs as fears grow about a possible global recession.

Donald Trump on Tuesday urged China to reach out to begin trade negotiations after Beijing told airlines not to take any further deliveries from planemaker Boeing.

Beijing announced unexpectedly today that it has appointed a new trade negotiator.

Tech stocks dropped sharply in Asia after Nvidia warned it faces a $5.5bn (£4.1bn) hit as a result of Donald Trump’s deepening trade war with China.

Shares of Japanese testing equipment maker Advantest dropped as much as 7.8pc while Korean memory maker SK Hynix slumped 3.9pc. 

Nvidia’s top semiconductor supplier TSMC fell 2.9pc.

Tim Waterer, chief market analyst at KCM Trade in Sydney, said: “It is a reminder of the potential susceptibility of tech stocks to the ongoing prickly relationship between the US and China regarding semiconductors. 

“There is a reliance on the H20 chip from big name players in the Asian tech space, so any moves which could impact supply will be a drag on the broader sector.”