Downing Street has admitted the UK is now likely to face Donald Trump’s tariffs this week as the US president’s threats of a global trade war sparked fears of a global recession.
Mr Trump will unveil sweeping tariffs on any country that “treats the US unfairly” on Wednesday. The two-time president has dubbed the move “liberation day”.
Sir Keir Starmer’s government has been trying to negotiate an economic deal with the US, which it is hoped could protect UK businesses from the worst impacts of Mr Trump’s plans.
But that will not be in place before Wednesday and trade talks alone are unlikely to be enough to exempt the UK from the president’s desire to impose tariffs on imports to the US from around the world.
Losses deepened for the UK’s FTSE 100 stock exchange, which was trading around 1.3 per cent lower on Monday.
On Wall Street, the S&P 500 rose 0.6 per cent in a roller-coaster day, after being down as much as 1.7 per cent during the morning.
Mr Trump's threats have provoked threats of retaliatory tariffs from affected countries, increasing fears of an escalating global trade war.
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Key points
- UK set to be hit by Trump's tariffs this week, Downing St admits
- Business leaders warn Starmer against retaliatory tariffs on US
- Tories accuse Labour of trade failure
- European stock markets unsettled at close
Farage says tariff retaliation would be 'self-harm'
21:09
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Jabed Ahmed
Reform UK leader Nigel Farage, who is a prominent supporter of the US president, said that tariffs “won’t be popular with anybody, not me either” but that retaliation would be “an act of self-harm”.
“What disappoints me more than anything is we had a massive opportunity in Trump’s first term to do a free trade deal with America,” he said.
“We didn’t do it because the Conservatives didn’t deliver Brexit, we weren’t free to do it, but we did negotiate nearly three quarters of the chapters that we needed to get to that position… But I do think we can sort this out.”
European stock markets unsettled at close as US tariffs edge closer
21:01
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Jabed Ahmed
European stocks fell on Monday as concerns swept through financial markets, days before US President Donald Trump’s tariff plans are due to take effect.
London’s FTSE 100 was down more than 100 points during the lows of the day. At close, it had lost 76.04 points, or 0.88%, to settle at 8,582.81.
The sell-off was more pronounced for other top European indexes. Germany’s Dax fell 1.33%, and France’s Cac 40 tumbled 1.58%.
Experts said fears of an escalating trade war meant there was “nowhere to hide in the stock market” with a raft of global stocks caught up in the panic.
Kathleen Brooks, research director at XTB, said: “There is an air of capitulation in financial markets ahead of the April 2 reciprocal tariff announcement from the US.
“Tariff fears have deepened over the weekend, there has been no let-up from president Trump, who said that no country would be able to avoid his reciprocal tariffs. This dashed any hopes for a last-minute reprieve.
“There is nowhere to hide in the stock market as equities get caught up in the tariff headwinds, which is not helped by the fact that it is the last trading day of first quarter.”
US tariffs a ‘huge headache’ for small firms, warns FSB
20:28
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Jabed Ahmed
The Federation of Small Businesses (FSB) said that 60 per cent of its members export to the US.
Tina McKenzie, policy chair of the FSB, said: “There is no skirting around the fact that tariffs are going to be a huge headache for small firms.
“Extra costs are the last thing businesses need, especially at a time where nine in 10 small and medium sized businesses (SMEs) believe exporting is important to the overall economy. With 59 per cent of small exporters currently exporting to the US, any disruptions to trade could have a huge ripple effect.”
Pictures from the New York Stock Exchange as markets in turmoil over looming Trump tariffs
20:17
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Jabed Ahmed
Recap | UK braced for Trump tariffs as No 10 acknowledges exports unlikely to be spared
20:00
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Jabed Ahmed
British firms look set to be hit by Donald Trump’s tariffs after Downing Street acknowledged the UK was unlikely to be spared.
The US president is set to unveil sweeping import taxes on goods from countries around the world on Wednesday, an event Mr Trump has dubbed “liberation day”.
Sir Keir Starmer’s government has been trying to negotiate an economic deal with the US, which it is hoped could protect UK businesses from the worst impacts of Mr Trump’s plans.
But that will not be in place before Wednesday and trade talks alone are unlikely to be enough to exempt the UK from the president’s desire to impose tariffs on imports to the US from around the world.
The Prime Minister’s official spokesman said: “When it comes to tariffs the Prime Minister has been clear he will always act in the national interest and we’ve been actively preparing for all eventualities ahead of the expected announcements from President Trump this week, which we would expect the UK to be impacted by alongside other countries.
“Our trade teams are continuing to have constructive discussions to agree a UK-US economic prosperity deal.
“But we will only do a deal which reflects this Government’s mandate to deliver economic stability for the British people, and we will only act in the national interest.”
Asked whether the Government had given up hope of a UK-US deal being signed before the tariffs are announced, the spokesman said he is “not going to put a time frame on those discussions” but that they are “likely to continue beyond Wednesday”.
Two thirds of UK businesses to be hit by US tariffs, warns BCC
19:46
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Jabed Ahmed
In a sign of the damage done by tariffs he British Chambers of Commerce (BCC) has estimated that almost two thirds (63 per cent) of businesses it represents will be hit by the new tariff war.
William Bain, head of trade policy at the BCC pointed that the Office for Budget Responsibility (OBR) last week warned that a trade war with the US will wipe out all the headroom chancellor Rachel Reeves had given herself in the spring statement leaving the government vulnerable to major events.
“Tariffs mean prices and costs will inevitably go up and this is a lose-lose scenario for consumers, businesses, and economic growth. But the imposition of more tariffs by the US does not mean we have reached the end of the road in terms of negotiations. Tariffs can be lifted at any time.”
The BCC and others are urging the UK government to push ahead with its talks on a trade deal with the US in an attempt to reverse the tariffs.
Any country treating US unfairly should expect tariffs, White House says
18:59
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Jabed Ahmed
Any nation that treats the United States unfairly should expect to be targeted by tariffs, the White House said, two days before US President Donald Trump is expected to announce what he has said will be sweeping, reciprocal tariffs.
"Any country that has treated the American people unfairly should expect to receive a tariff in return on Wednesday," White House spokesperson Karoline Leavitt told reporters, declining to give any further details.
Trump’s UK steel tariffs may have hidden benefits, says supply chain expert
18:59
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Jabed Ahmed
Donald Trump's decision to impose a 25 per cent tariff on UK steel has sparked concerns about the future of Britain’s struggling steel industry.
However, Oliver Chapman, Group CEO of OCI, believes the impact may not be as severe as feared—and could even bring unexpected benefits.
"I don’t believe that these tariffs will have as much of an impact on the UK economy as people think," Mr Chapman said.
He pointed out that the UK is a net importer of steel, buying $7.3 billion worth worldwide while exporting $5.4 billion. Only 9 per cent of UK steel exports go to the US, with 70 per cent heading to Europe.
The tariffs mainly target high-grade steel used in military, construction, and automotive industries. Mr Chapman suggested that Trump could be using the move as a strategic play.
"These tariffs are only on £370 million worth of imports and therefore won’t hit the UK hard. Trump may be signalling that if the UK backs the US on this, it will receive support in return."
He also argued that the shift could strengthen UK-EU trade. "Because of Brexit, this could indirectly benefit the UK by increasing steel exports to Europe instead of the US."
While some fear higher steel prices, Mr Chapman dismissed those concerns. "Why would prices go up? The UK will simply export more steel to Europe. If anything, prices could stay the same or even fall."
Full report | Trump reportedly pushes his team to be more ‘aggressive’ with tariffs - including a 20% levy for all countries
18:28
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Jabed Ahmed
Recap | What tariffs is Trump threatening?
17:59
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Jabed Ahmed
The US president’s self-styled “Liberation Day” -- which will see tariffs slapped on goods around the world - is set for Wednesday 2 April.
He has vowed to introduce a raft of “reciprocal” tariffs on the US’s trading partners, which he claims will boost the American economy.
This could include a general 20 per cent tax on UK products in response to the rate of VAT, something experts warn could shrink the British economy by 1 per cent.
Mr Trump has already announced a 25 per cent import tax on all cars imported to the US, a measure expected to hit British luxury car makers such as Rolls-Royce and Aston Martin.
Construction industry warns tariffs could derail Labour's housebuilding targets
17:28
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Jabed Ahmed
The construction sector is bracing for a potential crisis as new trade tariffs threaten to drive up material costs and put further strain on housebuilding targets.
Amit Oberoi, Group CEO of the Considerate Constructors Scheme, warned that "any uncertainty in the supply chain presents difficulty for the construction sector and for the government’s 1.5 million homes target, a goal which, for multiple reasons, is already a big ask."
The British steel industry is particularly vulnerable, with tariffs expected to disrupt exports to the US. "Although decreased demand from the US might lead to lower prices in the short term, in the longer term it will likely mean reduced domestic supply and fewer domestic steel producers, causing costs to soar," Mr Oberoi explained.
The construction sector has already been grappling with soaring material prices. The pandemic disrupted supply chains, pushing costs up, while inflation added further pressure.
Building costs are projected to rise by 15 per cent over the next five years, and any additional strain could be "catastrophic for housebuilders," Mr Oberoi warned.
Trump tariffs threaten EU growth as economists warn of rising costs
16:58
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Jabed Ahmed
The European economy is bracing for a hit from Donald Trump's proposed tariffs, with analysts warning of a significant knock to GDP and potential job losses.
Ruben Dewitte, economist at ING, has calculated that the tariffs could shave 0.33 per cent off EU GDP in the short term.
While that may seem minor, he said, it comes at a time when many economies have been stagnating.
"The cost will be considerable," he warned, adding that the long-term impact could reach 0.87 per cent if tariffs rise to 25 per cent, leading to decreased investment and further economic strain.
The United States is the EU’s largest trade partner, accounting for 20 per cent of extra-EU exports—worth €504 billion in 2023, Mr Dewitte said.
Germany is the most exposed country, with exports to the US totalling €158 billion. Meanwhile, Ireland faces the highest GDP exposure at 9.7 per cent, largely due to its pharmaceutical and tech exports.
On average, EU exports to the US consist of 77 per cent domestic-added value, meaning the tariffs will hit local economies hard.
Mr Dewitte warned that EU exports to the US could drop by 19 per cent, with additional fallout including weakened investor confidence and financial market disruptions.
UK and Finland ‘tied hip-to-hip’ on Nato, says Finnish president in No 10 visit
16:28
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Jabed Ahmed
The UK and Finland are “tied hip-to-hip” on Nato, Finnish president Alexander Stubb has said after meeting Sir Keir Starmer in Downing Street.
A red carpet was rolled out on the steps of No 10 on Monday afternoon for the Finnish president, who also met US President Donald Trump on Saturday.
Addressing media inside No 10, Mr Stubb, who said much of his family had dual Finland-UK nationality, added that “Keir and I hit it off, in the beginning, straight off the bat”.
The Finnish president added: “I’m really glad to see the leadership the UK is showing, not least in the war in Ukraine. And in many ways, in my mind, the UK is back, back in the game.
“We’ve had an interesting week in many ways, last week in Paris with the Coalition of the Willing, many phone calls with Zelensky, myself meeting President Trump on Saturday, and we continue the conversations today and try to find solutions together.
“But I think Finland and the UK are tied hip-to-hip and in so many places, including Nato and of course, JEF (Joint Expeditionary Force) which you guys founded.”
Sir Keir said Mr Stubb was “welcomed as a leader and a friend”, adding that the UK and Finland had a “great relationship”.
The Prime Minister added: “I know that on all the important issues, whether it’s Ukraine or other global issues, our thinking is very closely aligned.
“And certainly I think the closer we can work together on some of these challenges, the better.”
Tories accuse Labour of trade failure as US tariff threat looms
16:16
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Jabed Ahmed
Andrew Griffith, shadow trade secretary, said: “This news is potentially a hammer blow not just to British businesses and workers but to his own Chancellor whose creative accounting at the emergency budget fails to include the impact of tariffs.
"Labour claims talks with the US are going ‘well’. But, if this is what well looks like, I wouldn’t like to see what the opposite looks like. The Prime Minister has so far failed to come up with the goods, he needs to rekindle our US trade deal.
"This is just further proof that, when Labour negotiates, Britain loses."
In numbers: Which countries will suffer most from Donald Trump’s car tariffs?
15:57
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Jabed Ahmed
The Independent’s data correspondent Alicja Hagopian reports:
Trump's tariffs will have 'drag on global activity'
15:29
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Jabed Ahmed
Many economists believe that trade tensions sparked by Mr Trump will slow economic growth around the world.
The Organisation for Economic Co-operation and Development (OECD) said earlier this month that US trade policy would be a “drag on global activity” and hit living standards around the world.
“Overall, consumers face much of the burden of higher tariffs,” the OECD said in its economic outlook report, with real disposable incomes estimated to decline by 1,600 US dollars (£1,237) per household in the US.
In terms of the UK impact, experts say there is a great amount of uncertainty about how tariffs will filter through to households and businesses, especially if the country avoids steep penalties.
Economists at the Bank of England said the effect on inflation in the UK would depend on how other countries respond with their own trade policies, and how foreign exchange rates are affected.
Economist Swati Dhingra, a member of the Bank’s Monetary Policy Committee, has said the UK is sensitive to changing import prices.
But she suggested that the inflation impact could be “less than feared” because the main goods that the US imports from the UK, including refined oil, were unlikely to see cost increases on account of tariffs.
The Bank, which sets UK interest rates, said it was a “rapidly evolving situation” that it was monitoring closely.
Full report | US stock market spooked by Trump’s reciprocal tariffs on all countries this week
15:09
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Jabed Ahmed
Within the first few minutes of opening Monday, the Dow Jones Industrial Average plummeted 302 points, or .74 percent, while the Nasdaq Composite dipped 320 points, or 1.85 percent.
Kelly Rissman, in New York, reports:
Starmer facing 'impossible task' of potential retaliation to Trump tariffs, says expert
14:51
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Jabed Ahmed
Sir Keir Starmer is facing an “impossible task” in deciding whether to retaliate to Trump’s looming tariffs, an expert has warned.
Simon Finkelstein, director of geopolitics at the Brunswick Group said “It would be foolish to do so, however, politically it might become untenable not to do so.”
“Fundamentally he's got an impossible task because the people who work for the President clearly don't know what he's going to do on Wednesday either,” he told Times Radio.
“But I think the thing [Starmer] has got to do is continue on the same strategy, which is attempt to negotiate some sort of future deal with the US, whether that looks like something sort of wider range or more limited on technology to mitigate the worst aspects of the tariffs.”
“The UK government has to at least try,” Mr Finkelstein added.
Pictured | Starmer welcomes the President of Finland to Downing Street for bilateral talks
14:34
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Jabed Ahmed
Trump tariff fears send markets tumbling as investors seek safety in gold
14:24
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Jabed Ahmed
Financial markets are facing a wave of uncertainty as investors brace for the fallout from Donald Trump's latest tariff threats.
London-listed stocks are expected to suffer, with the FTSE 100 set for a turbulent start to the week.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, warned that "the last day of March is spring-loaded with uncertainty" as concerns over sweeping tariffs send markets into turmoil.
Asian indices have already seen sharp declines after hopes for a more targeted approach to duties faded.
Over the weekend, Mr Trump signalled that broad new tariffs would take effect on Wednesday —dubbed ‘Liberation Day’ — raising fears of a global trade war.
"He appears determined to target countries across a range of sectors," Ms Streeter said, but warned that reviving domestic industries would take years and lead to higher costs in the meantime.
The uncertainty has fuelled recession fears in the US, further unsettling markets.
With inflation already running hot, expectations of US interest rate cuts are fading.
Meanwhile, gold has surged above $3,100 as investors seek safe havens.
"The gold rush has sparked a rush of interest from individual investors," Ms Streeter noted, as buyers snap up gold amid fears of further economic instability.
Owner of Aston Martin increases backing amid Trump tariff turmoil
14:11
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Jabed Ahmed
The billionaire owner of Luxury car manufacturer Aston Martin has announced he will increase his share in the company as it faces huge losses from Donald Trump’s tariffs.
Executive chairman Lawrence Stroll said his consortium, Yew Tree, had increased its holding in the company from 27.7 per cent to around 33 per cent.
Yew Tree has acquired 75 million new shares, raising around £52.5million for Aston Martin.
On behalf of the Yew Tree Consortium, Mr Stroll said: "I am pleased to clearly demonstrate my unwavering support and commitment to Aston Martin.”
"Now five years into Aston Martin's transformation, I remain highly confident about the company's medium-term prospects having re-positioned the Company as one of the most desirable ultra-luxury high performance automotive brands,” he added.
“The coming years will be pivotal in realising our vision and ambition.”
According to Bank of America, Aston is the most exposed luxury vehicle manufacturer, with almost 29 per cent of its sales happening in the United States.
Following the announcement, shares of Aston rose 6.8 per cent, putting them at the top of the FTSE 250. So far this year, they have dropped 35 per cent.
Charted | FTSE 100 tumbles amid Trump tariff war
13:56
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Jabed Ahmed
Recap | Looming Trump tariff deadline sparks fresh fears of higher costs worldwide
13:34
,
Jabed Ahmed
UK and European stocks dropped on Monday and global markets wobbled as Donald Trump’s tariff deadline looms.
The US president promised a “Liberation Day” on Wednesday, when a series of tariffs tailored to each of the country’s trading partners will come into effect.
London’s FTSE 100 was down by more than 1 per cent on Monday, and about 100 points were shaved off the index during the morning’s trading.
Germany’s Dax and France’s Cac 40 were also falling by more than 1.7 per cent.
It follows a bruising session on Friday in New York, where its top indices, the S&P 500 and Dow Jones, tumbled 2 per cent and 1.7 per cent respectively.
Mr Trump’s tariff policy has sent ripples through the financial markets as investors assess what the impact will be on global trade.
It has also driven sharp drops in share prices on Wall Street, as worries grow that US households and businesses will slow spending, in response to higher costs for those that rely on imports.
Lib Dems urge government to be 'tough' with Trump
13:19
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Jabed Ahmed
Donald Trump is “not a reliable guy for trade deals”, Sir Ed Davey said, as he urged the government not to rely on him to stick to any agreement.
Sir Ed told reporters at a local election campaign launch event in Oxfordshire: “If we can do a deal with Trump, well, fine. The question you’ve got to ask yourself is do you believe he’ll stick with it?
“He’s not a reliable ally. The evidence is overwhelming.
“He signed a deal with Canada when he was last president and he’s reneged on that, he even said it was a crazy deal, who would sign it? Forgetting that he signed it.
“This is not a reliable guy for trade deals.”
The Liberal Democrat leader added the government must be “tough” with Mr Trump.
Repeating his call for the government to impose tariffs on Tesla vehicles, Sir Ed said: “I haven’t read the whole of it because it was so awful, but he’s written a book called The Art Of The Deal. I got mine second-hand, I’d like to say, I don’t want to put money in his pocket.
“But in the Art Of The Deal he talks about if the other guy looks desperate or weak, he’s going to walk all over you. So I think if you’re dealing with Donald Trump you’ve got to realise who you’re dealing with.
“He’s not an ordinary American president where we can be friends and trust and have that great relationship we’ve had with so many American presidents, of all political parties, Republicans and Democrats.
“He’s not that sort of person. I think we’ve got to be tough with him.”
Analysis | Tariff admission is blow to Starmer’s charm offensive on Trump
13:04
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Archie Mitchell, Political Correspondent
The Independent’s political correspondent Archie Mitchell writes:
Since September, Sir Keir Starmer has had one mission above all else on the world stage: to keep Donald Trump onside.
The prime minister knows Washington is key to bringing about a sustainable end to the war in Ukraine, but under Mr Trump, the US is also key for his mission to get the economy back on track.
And with Mr Trump threatening tariffs left, right and centre, Sir Keir bent over backwards to try to curry favour with the commander in chief.
The PM hand-delivered Mr Trump an invitation from the King for an unprecedented second state visit, while refusing to condemn almost anything Mr Trump and his outriders Elon Musk and JD Vance said against the UK and Europe on the world stage.
But, with Mr Trump’s “liberation day” looming, Downing Street has admitted Sir Keir’s efforts have failed, and tariffs will rock our already ailing economy.
Government sources stressed on Monday that talks to secure a carve-out for Britain will not conclude before the raft of trade taxes are rolled out this week, while the prime minister’s official spokesman said you would “expect the UK to be impacted by” the levies.
Days after a spring statement which saw Rachel Reeves barely rebuild the government’s fiscal headroom, with the official spending watchdog warning a trade war could blow it to smithereens, Sir Keir looks once again to be facing a crisis.
What exactly are tariffs and why is Trump imposing them
12:59
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Tara Cobham
Tariffs are taxes paid by US companies on imported goods.
They are seen by Donald Trump as a way to bolster production by American firms, protecting home-grown manufacturers, while also punishing foreign countries for unfair trade practices.
Analysis | As FTSE 100 continues to trend downwards, look across Atlantic ahead of market opening
12:56
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Karl Matchett, Business and money editor
The Independent’s business and money editor Karl Matchett writes:
While the FTSE 100 continues to trend downwards for the day - now 1.4 per cent down approaching 1pm - it's also worthwhile looking over the other side of the Atlantic, ahead of the market opening on the Nasdaq and New York Stock Exchange.
Futures show heavy selling in pre-trading, with the likes of Nvidia set to open 4.2 per cent lower and Tesla more than 6.0 per cent down - and that after another heavy fall over 3.5 per cent for the carmaker on Friday last week.
Trump's tariffs and the wider global economic uncertainty they have caused means the US stock markets will be sharply in focus over the next couple of days as the American president details exactly who faces the next bout of cost add-ons, and on what.
Broker predicts euro area could fall into recession amid fears of global recession
12:35
Europe is expected to fare worse than the US, Goldman warned, as it projected the region's economy could enter into a "technical" recession this year.
The brokerage forecasts "little" growth for the rest of 2025, with non-annualised growth of 0.1 per cent, 0.0 per cent and 0.2 per cent in the second, third and fourth quarter, respectively.
The brokerage expects Trump to implement a reciprocal tariff on the European Union amounting to 15 percentage points, raising the total effective tariff rate by 20 percentage points.
"We estimate that our new tariff assumptions will lower euro area real GDP by an additional 0.25 per cent compared to our previous baseline, for a total hit to the level of GDP of 0.7 per cent compared to a no-tariff counterfactual by end-2026," Goldman said in a separate note on Sunday. However, in a more "downside" scenario of tariffs, Goldman sees a total hit of 1.2 per cent to the economy, which could push the euro area into a technical recession in 2025, compared with a no-tariff scenario. The brokerage said it now expects the ECB to deliver an additional cut in July, along with its previous forecast of a rate cut each in April and June.
Goldman raises odds of US recession to 35% and predicts three interest rate cuts
12:32
,
Tara Cobham
Goldman Sachs raised the probability of a US recession to 35 per cent from 20 per cent and said it expects more rate cuts by the Federal Reserve, as President Donald Trump's tariffs roil the global economy and upend financial markets.
The brokerage also lowered the world's largest economy's GDP growth forecast for 2025 to 1.5 per cent from 2.0 per cent and projected three interest rate cuts each from the US Fed and the European Central Bank from its previous expectation of two each.
Trump said on Sunday his reciprocal tariffs, to be announced this week, would include all countries and not a more limited number, rattling financial markets globally over fears of an economic slowdown.
In a separate note, Goldman also cut its year-end target for the S&P 500 index for a second time this month to 5,700 from 6,200, the lowest among Wall Street brokerages, followed by Barclays's target at 5,900.
UK set to be hit by Trump's tariffs this week, Downing St announces
12:29
,
Tara Cobham
Downing Street is expecting the UK to be hit by Donald Trump's tariffs this week, as discussions with the US are set to continue beyond Wednesday.
The Prime Minister's official spokesman said on Monday: "When it comes to tariffs the Prime Minister has been clear he will always act in the national interest and we've been actively preparing for all eventualities ahead of the expected announcements from President Trump this week, which we would expect the UK to be impacted by alongside other countries.
"Our trade teams are continuing to have constructive discussions to agree a UK-US economic prosperity deal. But we will only do a deal which reflects this Government's mandate to deliver economic stability for the British people, and we will only act in the national interest."
Asked whether the Government had given up hope of a deal being signed before Wednesday, the spokesman said he is "not going to put a time frame on those discussions" but that they are "likely to continue beyond Wednesday".
He said that the UK will "take a calm and pragmatic approach in our response".
Once tariffs are imposed they are hard to reverse, warns expert
12:25
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Political editor David Maddox
The Independent’s political editor David Maddox writes:
Another leading trade expert has warned that it will be hard to unwind Donald Trump's tariffs once they are unleashed.
Chris Southworth, secretary general of the International Chamber of Commerce United Kingdom (ICC United Kingdom), has also warned of dire consequences for the UK car industry which sells 17 per cent of its products to the US.
He said: "There is no avoiding the impact of tariffs given the integrated nature of the UK and US economies. UK auto companies selling cars to the US will feel an immediate impact but more importantly, the scale of tariffs has the potential to wipe out the £9bn headroom the government announced in the Spring Statement.
"Nobody wins from a tariff war. These measures will impact firstly the poorest of American consumers, increasing prices as the increased costs will ultimately be passed on to consumers.
"But if we take a step back from the US consumer and look at where the goods come from this will impact exporters around the world who sell into the US. Around 17% of all cars manufactured in the UK last year went to the US.
"Businesses need certainty to operate, to plan, to invest. If demand for these slow it will certainly impact production, which will then impact jobs and have a ripple effect through the supply chain.
“It's very difficult if not impossible to mitigate the impact of tariffs once they come into force especially if every country retaliates. Unwinding the tariffs once in place will require a tremendous amount of diplomatic effort all of which diverts resources away from where they should be on working together to solve the issues we all face as a global community.”
Trump’s tariffs will mean everyone loses, warn experts
12:08
Donald Trump’s threatened global tariffs have led to many uncertainties with the only certainty, according to experts, being that “everyone loses”.
Economic research company Capital Economics warns: “Tariff wars have no real winners – only mounting costs and unintended consequences.”
It also suggested the tariffs are likely to remain in place for a while, with countries like China set to face more aggressive increases.
The economists write: “To this end, they would represent both a shift in US revenue mix but also represent a new front in global fracturing.”
Pound on track for best month against dollar in over a year as US faces recession fears
11:58
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Tara Cobham
The pound has risen against the dollar to be on track for its best month in over a year as the US faces the prospect of a recession after Donald Trump announced international tariffs, according to financiers.
Sterling was said to be headed for an increase of nearly 3 per cent against the dollar this month, taking it to its best month since November 2023.
Michalis Rousakis and Claudio Piron, from Merrill Lynch, told The Telegraph: “Across-the-board tariffs would be a negative surprise, in our view.
“Our main concern is ‘something breaking’ from aggressive tariffs, triggering a tail risk of a sharp market sell-off, pushing the dollar much higher in the short term.”
Kremlin responds to Trump sanctions threat
11:51
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Tara Cobham
The Kremlin, asked about Donald Trump’s sanctions threat, has said that Russia is working with the US on Ukraine settlement ideas.
The Kremlin said on Monday that Russia and the US were working on unspecified ideas on a possible peace settlement in Ukraine after US President Donald Trump said he was "pissed off" at Russian President Vladimir Putin.
Trump told NBC News he was very angry after Putin last week criticised the credibility of Ukrainian President Volodymyr Zelenskiy's leadership, the television network reported, citing a telephone interview early on Sunday.
Trump said he would impose secondary tariffs of 25 per cent to 50 per cent on buyers of Russian oil if he felt Moscow was blocking his efforts to end the war in Ukraine.
Asked about Trump's comments, Kremlin spokesman Dmitry Peskov said Putin remained open to contacts with Trump and that a call between them could be set up at short notice if necessary though no call was scheduled for this week.
Peskov said Moscow and Washington were continuing to work on building up bilateral ties.
Trump tariffs will result in a major geo-political shift, expert claims
11:45
,
Political editor David Maddox
The Independent’s political editor David Maddox writes:
One of Britain’s leading trade experts believes that if Donald Trump goes ahead with his round of tariffs on Wednesday 2 April it will result in a major geo-political shift.
Marco Forgione, director general at the Chartered Institute of Export and International Trade, has suggested that it will result in major western democracies turning their backs on the US and working more closely together.
He told The Independent: “There is going to be a geo-political shift with Canada, EU, UK and Australia forming a closer trading partnership.
“That means the development of either a formal or informal collaboration. It won’t replace the US market but certainly regarding commodities could establish a new collaborative trading community.”
The shift fits into the UK’s current membership of the Comprehensive and Progressive Trans Pacific Partnership (CPTPP) which Canada and Australia are already members of as well as Japan.
But it would also potentially help Sir Keir Starmer with his Brexit reset talks with the EU.
'Asia is ground zero': Shares tumble from Thailand to Taiwan
11:44
,
Tara Cobham
Asian shares tumbled today with benchmarks in Tokyo and Taiwan falling more than 4 per cent, while the price of gold hit a record high at nearly 3,150 dollars an ounce.
Many of the countries that run trade surpluses with the US and depend heavily on export manufacturing are in Asia, Stephen Innes of SPI Asset Management said in a commentary.
"Asia is ground zero. Of the 21 countries under USTR (US Trade Representative) scrutiny, nine are in Asia," he noted.
Thailand's SET lost 1.5 per cent after a powerful earthquake centred in Myanmar rattled the region.
Tokyo's benchmark fell 4.1 per cent to 35,617.56, while the Hang Seng in Hong Kong lost 1.2 per cent to 23,135.01. The Shanghai Composite index declined 0.5 per cent to 3,335.67.
In South Kore
