The FTSE 100 and S&P 500 are both set to open dramatically lower after US president Donald Trump revealed severe tariffs on American trading partners yesterday evening.

The FTSE 100 is set to open down 1.6 per cent after the UK was hit by a sweeping 10 per cent tariff on exports to the UK from next week, along with Trump’s 25 per cent tariff on automobiles for all countries.

The move came as a blow to the UK stock market and wider economy. Current exports total £60bn worth of goods to the US each year, including £7.6bn worth of cars last year.

European stock markets could be hit even harder. The German DAX is set to open down two per cent, after the European Union was slapped with a 20 per cent tariff.

The crash has been managed by reports that the EU is preparing a package of emergency measures to support sectors that will be hit hardest by the US tariffs.

However, initial indications suggest US markets could be hit hardest. The S&P 500 and Nasdaq are down more than three per cent in futures trading, while government bonds yields have sunk to their lowest since the start of the year.

“The tariffs put in place last night were extraordinary both in terms of scale and in how they were calculated,” said Deutsche Bank analyst Jim Reid.