Liberation Day – as the White House grandly calls the unveiling of its new trade policy – is finally upon us.But what it actually means and what the impact will be is still not clear, as president Donald Trump keeps businesses and world leaders waiting until Wednesday to unveil the next round of tariffs.While Mr Trump has suggested all nations will be hit with additional levies – and Sir Keir Starmer has admitted the UK is unlikely to escape the new measures – it’s still far from certain exactly which industries will bear the brunt this time, with steel, aluminium and auto parts already subject to additional import costs.Here’s a look at what’s already known, what could happen, and what investors are doing as uncertainty reigns.Market responseThe top end of the UK stock market has performed relatively well this year, considering concerns over growth, inflation, still-high interest rates and the wider geopolitical landscape.The FTSE 100 is up more than 5 per cent year-to-date, in contrast to the US’ S&P 500 being down around the same amount. The uncertainty has hit smaller businesses more, with the FTSE 250 down 5.2 per cent in 2025 and the AIM All-Share Index down 4.3 per cent.More recently, while there was a sell-off on Monday ahead of these new tariffs, it eventually wasn’t as steep as had initially looked the case and Tuesday saw investors buying once more on price weaknesses, perhaps hinting that some saw limited further downside in share price terms, even with new tariffs to come.It has always been a fool’s game at guessing the stock market’s most immediate, very next move, but AJ Bell analysis notes that while the biggest tech stocks in America – the so-called Magnificent Seven – have lost a combined $2.3 trillion in the first quarter of this year, they “have strong growth prospects well into the future” and “that status makes them natural candidates to attract widespread buying when markets are more upbeat”.In the UK, defence stocks in particular have fared strongly so far, with a domestic political strategy based on increased spending in this area pushing share prices higher – while the price of gold, a traditional safe haven for investors, has repeatedly hit new record highs this year and is predicted by some analysts to rise even further across 2025.How bad could it get?Price hikes and job losses could have a total global economic toll of $1.4 trillion (£1.1 trillion) under the worst-case scenario according to Aston Business School. That is if “full global retaliation with reciprocal tariffs” is the eventual outcome, which would see the US economy in particular hit.Naturally, if the entire planet is affected to that scale, the UK wouldn’t be exempt, but there’s still scope for changing trade paths, perhaps seeking out partners to increase back-and-forth business with if a reliance on the US is no longer plausible.Quite aside from the businesses involved, government spending could also be impacted. Last week, Rachel Reeves noted the government was laying out savings to restore £9.9bn of headroom for government expenditure.One assessment of a worst-case scenario involving Trump tariffs and the UK suggests that would be entirely and immediately wiped out.David Miles, from the Office for Budget Responsibility’s (OBR) Budget responsibility committee, told MPs: “If tariffs at 20 – 25 per cent were put on the UK and maintained for five years, our assessment of what that does is that it will knock out all the headroom that the government currently has.“Had we made that a central forecast, and had the government not changed policy at all knowing that we were going to take that as our central forecast, then the headroom would have pretty much all gone.”Mr Miles noted the improbability of the “extreme” scenario, which would include a term beyond the next US presidential elections, but the OBR further noted the hit to business confidence across the UK caused by the uncertainty around tariffs and other costs.A more optimistic viewAt the other end of the scale, there’s the perspective that some changes could in fact mean the UK might actually benefit from a trade war. Again, it’s important to note that’s on a broad, all-encompassing term – there would still be businesses or industries negatively affected within that.But the OBR noted that if the UK avoided involvement in a trade war, reciprocal tariffs and the like, some redirected trade flows could end up increasing business this side of the water.Much of that is based around the fact that the UK-US trade deficit is far more reasonably balanced than, for example, the EU-US one.Professor Irina Surdu-Nardella, of Warwick Business School, told CNBC tariffs could yet have a limited impact on the UK.“Effects would be relatively limited to industries such as fishing and mining,” Ms Surdu-Nardella said, pointing to the “service-focused nature of the UK economy” meaning much of it would be unscathed by import tariffs.Of course, there’s also the possibility that Mr Trump and Mr Starmer find an agreement whereby British companies end up entirely unaffected by the whole process, potentially giving them a foothold to gain further business with overseas customers. 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