Starmer admits UK will face Trump tariffs this week amid global recession fears: Live updates

Independent

01-04-2025

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.
What exactly are tariffs and why is Trump imposing them
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.
Jabed Ahmed
Starmer facing 'impossible task' of potential retaliation to Trump tariffs, says expert
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.
Jabed Ahmed1 April 2025 03:00
Trump's tariffs will have 'drag on global activity'
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.
Jabed Ahmed1 April 2025 01:00
In numbers: Which countries will suffer most from Donald Trump's car tariffs?
In numbers: Which countries will suffer most from Donald Trump's car tariffs?
The UK's number-one goods export to the US is cars, worth £8.3 billion in the year up to November 2024; but countries worldwide will be affected by the new tariffs. Data correspondent Alicja Hagopian reports.
Jabed Ahmed31 March 2025 23:59
The Independent View | The financial markets no longer believe in Donald Trump's 'stable genius'
The financial markets no longer believe in Donald Trump's 'stable genius'
Editorial: The president's obsession with tariffs risks a repeat of the mistakes of the 1930s – and on 'Liberation Day', the world may pay a heavy price
Jabed Ahmed31 March 2025 23:00
Round up | Downing Street admits Britain will be hit by Trump's tariffs this week as worldwide trade war looms
Our political editor David Maddox and politics correspondent Archie Mitchell report on today's events:
Downing Street admits Britain will be hit by Trump's tariffs on Wednesday
Trump's tariffs could hit 60 per cent of firms directly, two major business groups have warned
Jabed Ahmed31 March 2025 22:00
Business leaders warn Starmer against retaliatory tariffs on US
Some business groups have warned Sir Keir Starmer against follow the EU in unleashing retaliatory measures.
John Longworth, chairman of the Independent Business Network (IBN), warned that UK tariffs on the US would be 'an act of self harm'.
He said: 'Tariffs are primarily self harm unless they attack strategic industries. Our goods trade with the US is broadly in balance. We should seek trade arrangements asap and ignore the naysayers. It will cut inflation, help consumers and UK business.
'We should avoid the EU tariff war and stop protecting expensive EU producers. If we get involved in a tariff war it will cut economic growth even further and add to inflation = stagflation.'
Meanwhile, 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.'
Jabed Ahmed31 March 2025 21:26
Farage says tariff retaliation would be 'self-harm'
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.'
Jabed Ahmed31 March 2025 21:09
European stock markets unsettled at close as US tariffs edge closer
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.'
Jabed Ahmed31 March 2025 21:01
US tariffs a 'huge headache' for small firms, warns FSB
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.'
Jabed Ahmed31 March 2025 20:28