Rolling coverage of the latest economic and financial news, as Trump delays tariffs on Canada and Mexico, and China hits back with its own sanctions

• China announces retaliatory tariffs moments after US levies take effect – live

Asia-Pacific markets are rallying this morning, despite the trade war breaking out between China and the US.

In Hong Kong, the Hang Seng share index has jumped by almost 2.5% while South Korea’s KOSPI has jumped 1.3%.

While markets are generally breathing a sigh of relief, relative to where we were over the weekend, the past few days have raised ongoing questions over Trump’s tariff policy plans. Some immediate concessions on the border issues have avoided immediate severe escalation, but Trump’s comments suggest that he will look to use the delay to leverage broader economic concessions.

Indeed, with tariffs being arguably the strongest economic tool that is almost fully at the President’s discretion, we should surely expect that these will continue to be used to both create negotiating leverage and pursue different objectives such as supply security, revenue generation and trade deficit reduction.