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      in US Politics

      Trump’s ‘liberation day’ tariffs: what’s at stake for UK and EU?

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      The EU and the UK are bracing for a damaging trade war with the US, as Donald Trump is expected to implement his threat to impose tariffs on imports from Europe.For weeks, he has named 2 April “liberation day”, with the unveiling of a tariff plan to reverse what he called “unfair practices that have been ripping off our country for decades”.What tariffs are expected?A 20% blanket tariff on nearly all imports to the US has been drafted by Trump’s aides.However, EU and UK leaders are concerned about the possibility of sectoral tariffs, as well as permanent levies he may impose to counter Europe’s VAT rates, which he considers a de facto tax.Trump, who once challenged the then German chancellor Angela Merkel for not ensuring there were more Chevrolets in Munich, has already announced tariffs on cars starting on 3 April.Will the UK be spared?The relative warmth Trump showed Keir Starmer in the Oval Office last month is unlikely to protect the UK, with tariffs expected on “all countries”. However, the UK has been racing to agree a deal, with the business secretary, Jonathan Reynolds, suggesting that if any country can secure a carve-out, Britain could.On Tuesday, Starmer said businesses did not want a tit-for-tat war. Instead of a “kneejerk” reaction, he would respond in a “calm and collected” manner.He hoped a trade deal, something that eluded a succession of UK governments over decades, would “mitigate” the impact of tariffs. The UK was this time seeking a much narrower “economic prosperity deal” rather than a more comprehensive “free trade agreement”.Although this would be far less expansive in scope, the hope is that it should be quicker to agree.Does Trump really hate Europe?European leaders were alarmed by the attacks on Europe by the vice-president, JD Vance, but Trump has been notably less visceral, confining his interests to defence and the trade imbalance.He has complained that the US was “ripped off by every country in the world” and that he was “not happy with the EU” as a place to do business. His exclusion of the EU in talks over Ukraine has ruptured the higher-level geopolitical transatlantic relationship.How will the EU react?Strongly. The EU has already announced a string of tariffs it plans to introduce on US imports targeting steel and aluminium in kind, as well as textiles, leather goods, home appliances, house tools, plastics and wood.Sources say it is also considering nuclear options, including tariffs on revenues generated in the EU by big tech firms and social media.This could be seen as highly provocative and would put Trump’s allies, such as Elon Musk and Jeff Bezos, in the crosshairs. It would also test the unity of the EU, with Ireland expected to argue against more punitive measures because of the dominance of the US tech sector in Dublin.The EU’s preference is to negotiate so it has decided to delay countermeasures to open a space for talks. Maroš Šefčovič, the European commissioner for trade and economic security, has already met the US commerce secretary, Howard Lutnick, and, although Šefčovič reportedly came home last week “empty handed”, he is operating the Brexit playbook, hoping to build a personal relationship that will provide credit in the bank when they get down to talks.Why not enter immediate negotiations?One EU official said there was no point negotiating with the US at this stage, saying it would be like arguing over rotten fish.“It is not very productive to now start negotiating about removing the tariffs,” the official said. “You put a stinking fish on the table, and then you start negotiating to remove that stinking fish, and then you say: ‘Wow, we have a great result: there’s no stinking fish on the table.’ That is not a very productive conversation.”Trade experts also say negotiations with the US would involve agreeing a strategy between 27 different member states, which could be tricky given the potential for splits between countries, as EU states negotiate trade deals as a unified bloc.What is Trump’s game plan?Trump has been obsessed with tariffs since the 1980s, when he railed against the Japanese buying up real restate in the US, an open economy, but with US investors unable to reciprocate in Tokyo.His goal is to reindustrialise the US and to repatriate jobs and taxes he thinks US companies should be paying at home rather than abroad. While currently at a 21% corporate tax rate, the US for a long time operated at a 35% corporate tax rate, pushing some of its biggest companies to push for lower taxes.To revive local industry, Trump wants to shorten the supply chain and make sure more components are manufactured locally.What does the data on trade show?The US is the largest importer of goods in the world, buying $3tn-worth of products in 2023. Its largest trade deficit is with China, from where it imports $279bn more than it exports, followed by the EU at $208bn.EU-US trade is worth €1.6tn but only three countries – Ireland, Germany and Italy – enjoy a surplus in goods trade.Germany’s trade surplus in goods was €57bn in 2023, according to official US data. In 2023, Germany sold €144bn-worth of goods to the US, of which €22bn was on cars. By contrast, the US sold €87bn-worth of goods to Germany, including €8.25bn-worth of cars.Ireland has the second-largest trade imbalance, a surplus of €50bn largely caused by the export of pharmaceuticals to the US from large US multinationals. But it has been consistently singled out by Trump and is seen as highly exposed.Italyhas a trade surplus of €41bn, selling about €65bn-worth of goods to the US. Packaged medicines and cars account for about €5bn and €4.66bn of all exports respectively.The UK has a more balanced relationship with the US. The US is Britain’s largest single-export market, worth £60.4bn in goods in 2023, accounting for 15.3% of the global total. The UK imported £57.9bn in goods from the US.How is business reacting?The US markets are spooked, with S&P 500 and Nasdaq closing March trade with their worst quarter performance since Russia’s invasion of Ukraine in 2022.The EU is presenting itself as a safe haven. “I do think investors at the moment are re-evaluating the EU and investing in the European Union. I think there’s a growing appreciation of the value of predictability and order on the global stage,” said Paschal Donohoe, Ireland’s finance minister.So far this year, the pan-European Stoxx 600 index has gained 6.4%, while the US S&P 500 index has lost 5% and had its worst quarter since 2022. More

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      in US Politics

      Wednesday briefing: What the latest wave of tariffs mean for the US, UK, Europe – and you

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      Good morning. According to Donald Trump, it’s “liberation day”: the advent of a new trade order in which Americans reap the benefit of massive tariffs on imports, and the rest of the world picks up the tab.Unsurprisingly, the United States’ trading partners tend to take a very different view. And they are doing everything they can to avoid being passive targets for the White House’s carnivorous vision of American exceptionalism.Trump will announce his plans at 4pm Eastern Time (9pm UK) in the White House’s Rose Garden – but it is still not clear whether a flat rate will be applied globally, or if the charge will vary by country instead. Even at the last minute, countries including the UK are hoping that they might win exceptions; political leaders, and financial markets, are on edge.For today’s newsletter, Guardian correspondents explain what the tariffs mean around the world – and when you can expect to feel the impact in your pocket. Here are the headlines.Five big stories

      Israel-Gaza war | Israeli Defence Minister Israel Katz announced a major expansion of the military operation in Gaza on Wednesday, saying large areas of the enclave would be seized and added to the security zones of Israel. Follow the latest here.

      Israel-Gaza war | Some of the bodies of 15 Palestinian paramedics and rescue workers, killed by Israeli forces and buried in a mass grave in Gaza, were found with their hands or legs tied and had gunshot wounds to the head and chest, according to two eyewitnesses. The accounts add to evidence pointing to a potentially serious war crime on 23 March.

      UK news | More than 20 women have contacted police to say they fear they may have been attacked by the serial rapist Zhenhao Zou, with detectives fearing there may be even more victims to come. Zou, 28, was convicted last month of raping three women in London and seven in China between 2019 and 2024.

      US politics | Cory Booker, the Democratic US senator from New Jersey, has broken the record for longest speech ever by a lone senator by spending 25 hours and five minutes inveighing against Donald Trump in the chamber. Booker’s speech was intended to highlight the “grave and urgent” danger that Trump poses to democracy.

      Cinema | Val Kilmer, the actor best known for his roles in Top Gun, Batman Forever and The Doors, has died at the age of 65. His daughter Mercedes told the New York Times that the cause of death was pneumonia.
      In depth: Concessions, retaliation, ‘friendshoring’ – and a new mood of volatilityView image in fullscreenOn Monday, Donald Trump told reporters that he had “settled” on a tariff plan – but according to CNN, White House officials were still presenting him with options on Tuesday. And White House press secretary Karoline Leavitt told reporters that he was “always up” for a phone call or negotiation with foreign leaders hoping to plead their case.That suggests the satisfaction Trump takes in the power he is able to exert through the United States’ economic might. And whereas in his first term he appeared sensitive to the markets giving his economic policies the thumbs down, he seems genuinely more bullish this time around. Even on the question of whether consumers will pay more, he has so far stuck to the line that the cost will be worth it in the end.“I couldn’t care less if they raise prices, because people are going to start buying American-made cars,” he said of tariffs on foreign cars on Sunday. And last month, of the tariffs on Canada and Mexico, he said: “We may have, short term, a little pain. People understand that.”Here’s what that stance means around the world.UK | What is Downing Street’s strategy?View image in fullscreenLast night, Pippa Crerar, Heather Stewart and Richard Partington reported that the UK is ready to offer a significant reduction in its digital services tax, a 2% levy on UK revenues that applies to big American tech firms including Amazon, Meta, Alphabet, eBay, and Apple.But while business secretary Jonathan Reynolds has insisted that the UK is in “the best possible position of any country to reach an agreement”, Downing Street acknowledges that it is unlikely to get a deal before tariffs come in on a global scale.“They’ve been aiming at an exemption ever since Trump was inaugurated,” Pippa, the Guardian’s political editor, said – one key reason that Peter Mandelson, a trade expert, was appointed as US ambassador. “Trump has talked about ‘being nice’ to countries that ‘haven’t made a fortune’ out of the US – they hope that’s aimed at us.”“They remain hopeful he’ll row back quickly because they say a trade deal is ready to go,” she added. “Despite what they say, the trade deal is as much or more about avoiding tariffs as having a brilliant economic relationship. So it’s a defensive move.”As well as the digital services tax, Trump appears to view VAT as unfair. “I just don’t see how they could change that,” Pippa said. “It’s paid by all companies, not just US ones. And there’s some anger within Labour that the US is trying to interfere with domestic taxation systems.”That speaks to some of the risks of caving to Trump’s demands. “They’re always thinking of the politics of it,” Pippa said. “But they believe that it’s worth a few bad headlines back home about sucking up to Trump to avoid the potential damage of a full blown trade war with the US which could cost our economy billions.”Markets | What kind of impact are we seeing?“We’ve had plenty of volatility already this year, partly because many analysts were complacent about how disruptive Trump would be,” said Graeme Wearden, who runs the Guardian’s daily business liveblog.“Several Wall Street firms have already cut their end-of-year forecasts for the US stock market in recent weeks, which shows that some of the recent drama is being priced in. But, having seen the US president announce tariffs against Mexico and Canada, and then delay them, investors probably won’t assume the Rose Garden announcement will be the end of the story.”MCSI’s index of global stocks showed a 4.5% fall in March, the biggest decline since September 2022. But that impact has not been evenly distributed. “There’s been a clear rotation out of US stocks this year, and into Europe,” Graeme said. “While the S&P 500 index of US shares is down 4.5% during 2025, the pan-European Stoxx 600 has jumped 6%.” The FTSE 100 has enjoyed its best quarter since 2022 as traders have looked for alternatives to US firms.If you’re looking for other signs that this is a nervous moment, the Cboe Volatility Index (Wall Street’s “fear gauge”), has climbed by a third in the last week – and is up 50% on a year ago. That is “a sign that investors expect volatile times”, Graeme said. But he added: “It was three times higher during the 2008 financial crisis, showing that a) investors aren’t in a full-blown panic, and b) there’s room for more volatility.”World | How are other countries responding?The UK is not the only country to seek carve-outs from Trump’s threatened universal tariffs: Japan, for example, has tried to persuade the US its manufacturers should be exempted from the 25% car tariff, and South Korea has sought an exemption from steel and aluminium exports.But the wider pattern is of major economic counterparts seeking to respond in kind. “Certainly the EU is expected to retaliate, and we’ve already seen Canada, for instance, hit back,” said economics editor Heather Stewart. “They’re most likely to try and pick up on specific products that hit the US without screwing up their own supply chains too much … Retaliation will tend to make the economic impact of tariffs worse; but politically, it’s understandable that countries want to look tough.”The other major plank of the global response has been an acceleration in moves towards “friendshoring” – the strategy of reorienting trade policies towards trusted allies with a more reliable approach. China, Japan and South Korea are holding talks over a new free trade deal, for example.“It was already happening to some extent,” Heather said, partly because of “renewed awareness of extended supply chains that came with Covid and Russia’s invasion of Ukraine. But I would definitely expect more deals that exclude the US.”Cost of living | When am I going to start feeling the impact?It’s still too early for the specific costs attached to tariffs to be felt in a major way by consumers – but “the price impact could already be beginning”, economics correspondent Richard Partington said. “Some economists reckon firms will raise their prices under the cover of tariffs, with the assumption that consumers think prices will rise – even if tariffs on those goods are never actually introduced.”skip past newsletter promotionafter newsletter promotionWhile that is hard to quantify, there is evidence from the US during Trump’s first term – when the cost of clothes dryers went up because of a tariff on imported washing machines – that it is a plausible path. Something similar might happen in the UK on goods sold from the US using components sourced from overseas, Richard said – but it’s also possible that “trade reallocation”, where countries send exports that might have gone to the US to other trading partners, could lead to price cuts.Consumers will be affected in other ways that are less direct – but no less real. There has been a marked impact on consumer confidence surveys, Richard said, and businesses are holding back on their spending plans. “The potential UK impact has been best spelled out so far by the OBR,” Richard said. “In the worst case scenario of global trade disputes escalating to include 20 percentage point rises in tariffs between the USA and the rest of the world, this could reduce UK GDP by a peak of 1%.”That would wipe out all of Rachel Reeves’ storied fiscal headroom by the fifth year of forecasts, making tax rises in the autumn inevitable. Uncertainty is another intangible but consequential factor, he added – “like a slow puncture on the global and UK economy”. You can keep juddering on – but it’s anybody’s guess when you’ll suddenly veer off the road.What else we’ve been readingView image in fullscreen

      The daily deluge of news has made many people turn off their televisions, unsubscribe from papers and avoid news websites. This phenomenon of news avoidance is growing across the board. Michael Savage takes a look at how newsrooms are responding. Nimo

      Oliver Wainwright’s writing on architecture is always compulsively enjoyable, and his review of a new student complex in Oxford meets those expectations. With “rhubarb and custard-coloured stonework” and a “bulbous roof of polygonal scales”, the overall effect is a “hallucinatory sense that you might have been swallowed into the belly of a cuddly toy”. Archie

      Reviewing culture has had an outsized influence on my decision-making: less than a 4.5 out of 5 rating and I likely won’t go to a restaurant or buy a product. But how helpful is it really? Chloë Hamilton asks what this level of “mutual surveillance” is doing to our lives. Nimo

      On the one hand, Daniel Lavelle has two degrees and two books to his name; on the other, he left education at 14 and started working life in a cotton mill. So where does he fit into Britain’s suffocating class system? His attempt to make sense of it all has the vital quality of thinking out loud, but no straightforward answers. Archie

      I recently started Benjamín Labatut’s novel The Maniac and I have never felt so engrossed in a book that focusses so closely on mathematics and physics. In this disquieting book that spans a century, Labatut examines the dark foundations of our modern world and the extraordinary and troubled minds behind it. Nimo
      SportView image in fullscreenFootball | Bukayo Saka scored the decisive goal in Arenal’s 2-1 win against Fulham seven minutes after coming off the bench on his return from injury. In the night’s other Premier League matches, Nottingham Forest beat Manchester United 1-0 and Wolves beat West Ham 1-0.Cricket | Charlotte Edwards has been named as the new England women’s head coach. The former England captain put her hat in the ring in February, when changes were expected after a disastrous tour of Australia last winter in which England lost the Ashes by 16 points to nil.Rugby | There remains a “high degree of uncertainty” over whether tens of millions of pounds paid to rugby union clubs and other sports teams during the Covid-19 pandemic will ever be repaid, a House of Commons committee has warned. The committee said that the Department for Culture, Media and Sport has been “overly optimistic” about loans worth £474m.The front pagesView image in fullscreen“PM offers US tech firms tax cut in return for lower Trump tariffs” says the Guardian’s splash headline, while the Telegraph’s version is “Starmer’s 11th-hour bid to halt trade war”. It’s “Trump trade madness” and “CARnage” on the front of the Mirror while the Times has “Firms told to brace for impact of Trump tariffs”. The Daily Mail finds reason to be cheerful: “Trump’s tariffs threaten crisis for Reeves” and the Express runs with “Don’t provoke new trade war that ‘makes UK poorer’,” saying Kemi Badenoch doesn’t want Starmer to retaliate. In the i they’ve gone with “UK told to ‘prepare for the worst’ as Trump begins his global trade war”. In times like these, trust the Financial Times with your money: “Investors flock to gold as fears mount on eve of Trump tariff announcement”. “Student rapist: 23 more victims” is the top story in the Metro.Today in FocusView image in fullscreenCould Marine Le Pen’s guilty verdict help fuel the far right?The parliamentary leader of France’s far-right National Rally party, Marine Le Pen, has been banned from public office for five years for embezzlement, ruining her chance of a presidential run. Angelique Chrisafis reportsCartoon of the day | Pete SongiView image in fullscreenThe UpsideA bit of good news to remind you that the world’s not all badView image in fullscreenJoy Ebaide, a Nigerian solo traveller, has embarked on many journeys across Africa, which all came with their own challenges. A heart-stopping encounter with a black mamba while riding her motorbike in Tanzania was terrifying, but it did not put her off travelling. Instead, it fuelled her desire to keep exploring. Ebaide embarked on a five-month solo journey from Mombasa to Lagos in 2024, riding a Tekken 250cc motorbike across Africa’s rugged terrains. Her travels, shared on social media, not only highlight the fun experiences but also shed light on the challenges faced by those with “weaker” passports.Ebaide is not alone in her pursuit of adventure despite these obstacles. Alma Asinobi, after facing visa refusals, set out to break a world record for visiting all seven continents. “The trip itself is a victory. Because historically, travelling as a black woman has an additional layer of complexity … I just want more women to know that you can do things, and it’s OK whether it works or not: just do things,” she says.Bored at work?And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.

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      in UK Politics

      How might Trump tariffs affect UK business on ‘Liberation Day’?

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      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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      in UK Politics

      Trump tariffs latest: Global cost of trade war revealed as Lammy says UK ‘preparing for the worst’

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      Starmer and Trump hold ‘productive negotiations’ between US and UK trade dealThe UK’s foreign secretary David Lammy has said Britain is “preparing for the worst”, after Downing Street admitted Britain would be hit by Donald Trump’s looming tariffs.Global markets have been rocked as the Trump administration prepares to unleash its so-called “Liberation Day” tariffs this week, with none of Washington’s trading partners expected to emerge unscathed from import taxes anticipated by Goldman Sachs to average 15 per cent.If the situation escalates into a full-scale trade war, it could cost the global economy $1.4trn, the Aston Business School estimates.Speaking after business secretary Jonathan Reynolds insisted no country was “better placed” than the UK to strike a deal with Washington, Mr Lammy told MPs: “It’s hugely important at this time that we continue the intense conversations we’re having with the US administration on getting an economic agreement.“But of course we prepare for the worst – all options remain on the table.”Goldman Sachs warned on Tuesday that, even with a US deal, the UK’s economy is still expected to suffer a greater hit than previously anticipated.Trump signs off Keir Starmer’s controversial Chagos Islands dealWhile Sir Keir Starmer may have failed to avert looming US tariffs hitting the UK, there was better news for the UK government as No 10 announced that Donald Trump has formally signed off Keir Starmer’s deal to hand the Chagos islands over to Mauritius.The agreement is now being “finalised” between the UK and Mauritius, Downing Street said.Kate Devlin and David Maddox have more details in this report:Andy Gregory1 April 2025 15:42The UK government’s approach to seeking an economic deal with Donald Trump is “not about sucking up to anyone”, the business secretary has insisted.Jonathan Reynolds told BBC Radio 4’s Today programme: “Standing up for the country, doing a strong response to this, is about pursuing your own national interest – and the UK’s national interest is in reaching an agreement. “We have things available to us that are not available to other countries, and that’s because the existing UK-US trading relationship is a fair and balanced one – the US does not have a significant deficit in traded manufactured goods, which is so much a part of their thinking. “So there are things available to us. It’s not about sucking up to anyone. It’s not about not responding. It’s about pursuing our national interest – that is what the government is doing. “And whilst there is a chance of delivering that, I think that is the right approach.”Andy Gregory1 April 2025 15:27Starmer asked if he feels ‘played’ by Trump over tariffsAsked if he had been “played” by Donald Trump as it appeared that efforts by Sir Keir to build a good relationship had failed to protect the UK from tariffs, the prime minister told Sky News: “The US is our closest ally.“Our defence, our security, our intelligence are bound up in a way that no two other countries are.“So it’s obviously in our national interest to have a close working relationship with the US, which we’ve had for decades, and I want to ensure we have for decades to come.”Andy Gregory1 April 2025 15:13Trump tariffs will impact UK economy, chancellor tells Cabinet colleaguesDonald Trump’s tariffs will have an impact on the UK economy, chancellor Rachel Reeves has told her fellow Cabinet ministers.Ms Reeves told this morning’s Cabinet meeting that “global tariffs will have an impact on the UK as an open trading economy”, but said that “securing a deal could mitigate some of those effects”.Andy Gregory1 April 2025 15:01Badenoch backdrop mocked as Tory woes overshadow press conferenceThe Conservatives’ have drawn mockery after Daily Mail’s political editor compared the backdrop used for Kemi Badenoch’s speech to an abandoned mattress.Sharing the image, Labour joked that “the DFS sale starts earlier every year”, while the Lib Dems wrote: “We thought the Tories were against fly tipping?”Attending the press conference, The Independent’s political correspondent Archie Mitchell wrote that the event felt like “a sign of how badly the party is struggling”, with the party’s lack of funds having “long been a talking point in Tory circles, with swathes of head office staff being made redundant to shore up the party’s finances”.Noting that the venue at Tory HQ felt “more like a classroom than a venue for a major political party’s conference”, he wrote: “Not only could they not rent out a suitable venue to host journalists, they could not get a usually friendly think tank or donor to put them up in a more appropriate spot.”Andy Gregory1 April 2025 14:47US should recognise UK is a free country with liberal values, says Kemi BadenochWashington’s State Department should recognise that the UK is “a free country with liberal values”, Tory leader Kemi Badenoch has said – after US officials expressed concern over the prosecution of a British anti-abortion campaigner.Ms Badenoch said that laws surrounding so-called “buffer zones” outside abortion clinics had been passed democratically and “we need to respect what Parliament votes for”.The anti-abortion campaigner, 64, was on trial at Poole Magistrates’ Court last month, accused of breaching the Public Spaces Protection Order on two days in March 2023. The verdict will be delivered on Friday.Andy Gregory1 April 2025 14:33Consumers may be spared from Trump tariffs, experts sayUK consumers could be spared from price rises following Donald Trump’s tariffs but job cuts could worsen for some of the hardest-hit firms, experts say.Mr Trump has imposed tariffs on UK aluminium and steel, and carmakers exporting to the US, in a bid to boost American production and protect home-grown manufacturers.The tariffs could have a major impact on the country’s car industry because it could make it harder for UK businesses to sell to the US.Economist Swati Dhingra, a member of the Bank’s Monetary Policy Committee (MPC), suggested that the inflation impact could be “less than feared”.This is because the main goods that the US imports from the UK, including refined oil, were unlikely to see cost increases on account of tariffs.Fellow economist and MPC member, Megan Greene, said tariffs could end up being “disinflationary”, meaning they help bring down the rate of overall price rises in the UK.Alexander Butler1 April 2025 14:26Chancellor has spoken with US counterpart ahead of Trump tariffs, Starmer’s Cabinet toldChancellor Rachel Reeves has spoken to her US counterpart ahead of the expected tariffs ordered by Donald Trump.Sir Keir Starmer’s Cabinet was told this morning that the chancellor spoke to US treasury secretary Scott Bessent on Monday, according to a No 10 readout of the meeting.Sir Keir also updated ministers on the US tariffs expected this week in response to any decision from the White House.Rachel Reeves imposed cuts to welfare but did not raise taxes in her spring statement. More

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      in US Politics

      Large majority of Europeans support retaliatory tariffs against US, poll finds

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      A large majority of western Europeans support retaliatory tariffs against the US, a survey has shown, if Donald Trump introduces sweeping import duties for major trading partners as expected this week.The US president appears likely to unleash a range of tariffs, varying from country to country, on Wednesday, which he has called Liberation Day. He also said last week that a 25% levy on cars shipped to the US would come into force the next day.Many European firms are likely to be hit hard. Some, including Germany’s car manufacturers and France’s luxury goods firms and wine, champagne and spirits makers, rely on exports to the US for up to 20% of their income.The EU has already pledged a “timely, robust and calibrated” response to Washington’s plans, which experts predict are likely to depress output, drive up prices and fuel a trade war. Global markets and the dollar fell on Monday after Trump crushed hopes that what he calls “reciprocal tariffs” – arguing that trading partners are cheating the US – would only target countries with the largest trade imbalances.A YouGov survey carried out in Denmark, France, Germany, Italy, Spain, Sweden and the UK found that if the US tariffs went ahead, large majorities – ranging from 79% of respondents in Denmark to 56% in Italy – favoured retaliatory levies on US imports.In both Germany, where carmakers such as Porsche, BMW and Mercedes face a significant blow to their profits, and France, where US sales of wines and spirits are worth nearly €4bn (£3.4bn) a year, 68% of respondents backed retaliation.Respondents in all seven countries favoured a tit-for-tat response despite the damage they expected US tariffs to do to their national economies, with 75% of Germans saying they expected “a lot” or “a fair amount” of impact.That assessment was shared by 71% of respondents in Spain, 70% in France and Italy, 62% in Sweden, 60% in the UK and half of Danes questioned in the survey, which was carried out in the second and third weeks of March.skip past newsletter promotionafter newsletter promotionOf the six EU countries polled, majorities of between 60% in Denmark and 76% in Spain thought US tariffs would have a significant impact on the bloc’s wider economy. That was the sentiment of 74% of German and 68% of French respondents.Trump, who was elected partly on a promise to restore US industry, has repeatedly complained that the EU has been “very unfair to us” when it comes to trade. He also said in February that the 27-nation bloc had been “formed to screw the United States”.Pluralities or majorities in all six EU countries surveyed, ranging from 67% in Denmark and 53% in Germany to 41% in France and 40% in Italy, said they did not agree with him, compared with only 7% to 18% who thought he was correct. More

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      Trump prepares to unveil reciprocal tariffs as markets brace amid trade war fears

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      As Donald Trump prepared to unveil a swathe of reciprocal tariffs, global markets braced and some Republican senators voiced their opposition to a strategy that critics warn risks a global trade war, provoking retaliation by major trading partners such as China, Canada and the European Union.The US president said on Monday he would be “very kind” to trading partners when he unveils further tariffs this week, potentially as early as Tuesday night.The Republican billionaire insists that reciprocal action is needed because the world’s biggest economy has been “ripped off by every country in the world”, promising “Liberation Day” for the US.He could also unveil more sector-specific levies.Asked for details, he told reporters on Monday: “You’re going to see in two days, which is maybe tomorrow night or probably Wednesday.”But he added: “We’re going to be very nice, relatively speaking, we’re going to be very kind.”Some Republican senators spoke out against Trump’s tariffs on Canada and are considering signing on their support for a resolution blocking them, CNN reported. Senator Susan Collins warned that tariffs on Canada would be particularly harmful to Maine and that she intended to vote for a resolution aimed at blocking tariffs against Canadian goods.Republican Senator Thom Tillis also said he was considering backing the resolution, adding: “We need to fight battles with our foes first and then try to figure out any inequalities with our friends second.”Already, China, South Korea and Japan agreed on Sunday to strengthen free trade between themselves, ahead of Trump’s expected tariff announcement.But Trump said on Monday he was not worried that his action would push allies toward Beijing, adding that a deal on TikTok could also be tied to China tariffs.White House press secretary Karoline Leavitt told reporters that the goal on Wednesday would be to announce “country-based tariffs”, although Trump remained committed to imposing separate sector-specific charges.The uncertainty has jolted markets, with key European and Asian indexes closing lower, although the Dow and broad-based S&P 500 eked out gains.Market nervousness intensified after Trump said on Sunday his tariffs would include “all countries”.The Wall Street Journal reported on Sunday that advisers have considered imposing global tariffs of up to 20%, to hit almost all US trading partners. Trump has remained vague, saying his tariffs would be “far more generous” than ones already levied against US products.Trump’s fixation on tariffs is fanning US recession fears. Goldman Sachs analysts raised their 12-month recession probability from 20% to 35%.This reflects a “lower growth forecast, falling confidence and statements from White House officials indicating willingness to tolerate economic pain”. Goldman Sachs also lifted its forecast for underlying inflation at the end of 2025.China and Canada have imposed counter-tariffs on US goods, while the EU unveiled its own measures to start mid-April. Other countermeasures could come after Wednesday.For now, the IMF chief, Kristalina Georgieva, said at a Reuters event on Monday that US tariffs were causing anxiety, although their global economic impact should not be dramatic.Ryan Sweet of Oxford Economics said to “expect the unexpected”, anticipating that Trump would “take aim at some of the largest offenders”.Besides reciprocal country tariffs, Trump could unveil additional sector-specific levies on the likes of pharmaceuticals and semiconductors. He earlier announced car tariffs to take effect on Thursday.Economists have expected the upcoming salvo could target the 15% of partners that have persistent trade imbalances with the US, a group that the US treasury secretary, Scott Bessent, has dubbed a “Dirty 15”.The US has some of its biggest goods deficits with China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, Canada and India.US trade partners are rushing to minimise their exposure, with reports suggesting India may lower some duties.The European Central Bank president, Christine Lagarde, said on Monday that Europe should move towards economic independence, telling France Inter radio that Europe faces an “existential moment”.Separately, the British prime minister, Keir Starmer, spoke with Trump on “productive negotiations” towards a UK-US trade deal, while the German chancellor, Olaf Scholz, said the EU would respond firmly to Trump but was open to compromise.It was “entirely possible” for fresh tariffs to be swiftly reduced or put on hold, said Greta Peisch, a partner at law firm Wiley Rein.In February, Washington paused steep levies on Mexican and Canadian imports for a month as the North American neighbours pursued negotiations.With Agence France-Presse More

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      Tesla investors brace for global sales data amid consumer backlash over Elon Musk

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      Tesla investors are bracing for evidence of declining global demand this week as the electric carmaker battles headwinds including a consumer backlash against its chief executive, Elon Musk.On 2 April, the US company will release data for first-quarter deliveries – a proxy for sales – that is expected to show a dip on the same period last year. The figures follow global protests on Saturday against Musk and Tesla, targeting the carmaker’s showrooms.Analysts have been lowering their forecasts amid evidence that Musk’s senior role in the Trump administration has damaged the Tesla brand.Dan Ives, managing director at the US financial firm Wedbush Securities and a self-avowed Tesla “core bull”, forecast deliveries to come in at between 355,000 and 360,000, a fall of 7% on the same period last year and down from initial predictions across Wall Street of 400,000.View image in fullscreenIves, who recently warned investors that Tesla was facing a “brand tornado crisis moment”, said 30% of the anticipated decline was due to brand damage associated with Musk and his involvement in the so-called department of government efficiency (Doge). The advisory body has targeted federal agencies with cost-cutting policies and redundancies.Other issues affecting Tesla’s figures during the first three months of the year include consumers waiting for an update to the top-selling Model Y. The US is Tesla’s biggest market.In a note to investors last week, Ives said that while “much of this softness is related to customers waiting for Model Y refreshes along with a lower-cost new model set to be launched by the summer … the anti-Musk and brand issues are clearly at play”.Matthias Schmidt, a Berlin-based electric car analyst, said Musk was “hitting his liberal consumer demographic exactly where it hurts”.“He has become the core toxic issue behind the disintegration of the brand and should step-aside before it explodes like one of his rockets,” added Schmidt, who is expecting first-quarter deliveries in western Europe to come in at just under 70,000 for the first time since the end of 2022.skip past newsletter promotionafter newsletter promotionView image in fullscreenAmong Tesla owners, the Democrat owner group has fallen from 40% during the Biden administration to 29% now, with the Republican group averaging about 30% since 2021, according to market research firm Strategic Vision.Last week, Donald Trump announced a 25% tariff on cars from overseas, with Tesla also expecting to be affected despite making its cars for the US market in America. The company imports some parts for its US-made cars. Last week, Musk wrote on X, his social media platform, that Tesla is “not unscathed” by tariffs. He added: “The tariff impact on Tesla is still significant.”The tariffs threaten to plunge the global auto industry into “pure chaos”, according to Ives. “Every auto maker in the world will have to raise prices in some form selling into the US and the supply chain logistics of this tariff announcement heard around the world is hard to even put our arms around at this moment,” he said in a note to investors last week.However, on Saturday, Trump said he “couldn’t care less” if carmakers raise prices in response to the tariffs on foreign-made vehicles. Indeed, the US president told NBC News that he hoped foreign carmakers raise prices as it means “people are gonna buy American-made cars. We have plenty.” More

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      Will Trump’s ‘Liberation Day’ be the start of a trade war – or another climbdown?

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      Donald Trump won back the White House with a promise to transform the US economy. Millions of Americans, struggling with higher prices and bigger bills, elected a president who pledged to revive his country’s industrial heartlands – and leave the rest of the world to pick up the bill.On Wednesday – a day dubbed Liberation Day by the president and his aides – Trump has vowed to pull the trigger and impose an historic barrage of tariffs on goods from overseas he claims will fund an extraordinary revival.Ten weeks after obtaining power, Trump has said he will raise tariffs on all products from countries that charge tariffs on US exports; hit goods from Canada and Mexico with sweeping duties; introduce steep tariffs on foreign cars, computer chips and drugs; and target countries importing oil from Venezuela with duties on their US exports.This is “the big one”, according to the president. Business leaders and economists are certainly worried about the scale of his trade strategy, which the Tax Foundation already estimates could knock US gross domestic product (GDP) by roughly 0.7% and cost about 500,000 US jobs.“The escalating tariffs are a body blow to the global trading system,” said Eswar Prasad, professor of trade policy at Cornell University, and a former official at the International Monetary Fund.Wherever you stand, a move on this scale would constitute a radical shake-up – and set the stage for a fundamental overhaul of the US economy. And yet, even as he ramped up the rhetoric, Trump has appeared to tread carefully.“I will immediately begin the overhaul of our trade system to protect American workers and families,” the president declared at his inauguration in January. “Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens.”While the threats were immediate, the action was not.Take Canada and Mexico. The administration has adopted a strikingly hardline stance against the US’s largest and nearest trading partners, but its imposition of blanket tariffs has been hit by a dizzying array of shifting deadlines, delays and reversals.An initial pledge to impose tariffs from “day one” shifted, without explanation, to February. When February rolled around, a last-ditch deal kicked the can to March. When the tariffs were finally imposed, it was a little over 24 hours before carmakers were granted a temporary exemption, and 48 hours before all goods covered by an existing trade deal between the US, Mexico and Canada were spared for another month.All the while, Trump and his most senior officials have slowly, but surely, accepted the risks they are raising in pursuit of the rewards they have vowed to obtain.“Tariffs don’t cause inflation,” the president claimed in January. OK, prices “could go up somewhat short term”, he conceded in February. “There’ll be a little disturbance,” he added in March, stressing that he was alright with that.The US treasury secretary, Scott Bessent, acknowledged earlier this month that there may well be a “one-time price adjustment” as a result of Trump’s tariffs. “Access to cheap goods is not the essence of the American dream,” he argued.While Trump predicts that slapping high US tariffs on foreign goods will prompt an influx of international companies to make products inside the US, rather than out, companies and investors worldwide are already struggling to keep up with his administration’s erratic trade policymaking.So far, since his return to office, Trump has hiked tariffs on Chinese exports to the US and raised tariffs on foreign steel and aluminium to 25%.The average US tariff rate has already shot up from 2.5% to 8.4% this year, the highest level since 1946, according to the Tax Foundation.Alex Durante, its senior economist, said the country is “inching towards” the kind of tariffs last seen since the 1930s, when the Smoot-Hawley bill, among the most decried pieces of legislation in US history, introduced tariffs on thousands of goods.“With each tariff action we’re rapidly approaching a universal tariff that would be damaging to the economy,” said Durante. “Behind the scenes, I think there is probably some concern, even among some of [Trump’s] staff, that they’re rapidly approaching the point of no return.”As his administration grappled with the fallout from the inadvertent inclusion of a journalist in a group chat about secret military plans last week, the president summoned reporters to the Oval Office to pre-announce tariffs on foreign cars. “This is very exciting,” he told them.The excitement is far from universal. Prasad, at Cornell, said: “We are shifting to a world where a commonly accepted set of rules is being displaced by unilateral actions that ostensibly promote a fair trading system, but will instead create volatility and uncertainty, inhibiting the free flow of goods and financial capital across national borders.”The car tariffs would be “a hurricane-like headwind to foreign (and many US) automakers”, said Dan Ives, an analyst at Wedbush Securities, who suggested they would push up prices by as much as $10,000 in the US. “We continue to believe this is some form of negotiation and these tariffs could change by the week,” he added, “although this initial 25% tariff on autos from outside the US is almost an untenable head-scratching number for the US consumer”.Such action is also widely expected to prompt retaliation – with US exporters in the firing line.While a spokesperson for the European Commission stressed it was too early to detail the European Union’s response to actions “still not implemented” by the US, they added: “I can assure you that it will be timely, that it will be robust, that it will be well calibrated and that it will achieve the intended impact.”Trump is watching closely. As countries and markets hit by new US tariffs consider how to hit back, the president publicly warned the EU and Canada that he would hit them with “far larger” duties if they worked together on their response.Some doubt whether the federal government has enough capacity to execute the trade onslaught which Trump has said is coming. “I simply just don’t think that [the US Trade Representative] right now has enough staff to even figure out how to implement some of these tariffs,” said Durante.But after myriad false starts and much fluctuation, the lingering question – despite all the shots, warnings and vows – is not how far Trump can take his trade wars, but how far he will.The president is, at heart, a salesman. In business, he sold real estate – with mixed success. In television, and then politics, he sold stories – with extreme success.Millions of Americans bought the image he constructed on The Apprentice of himself as a phenomenally successful entrepreneur. Millions more bought his promise on the campaign trail to share this phenomenal success with the rest of the nation.Trump is no longer selling a promise, but his strategy to deliver it. He won the White House twice by using stories, sometimes unbound by truth, to bend perceptions, break norms and build support. But rhetoric – however bold, and brash – can’t change reality.The president says unleashing a wave of tariffs, and triggering an abrupt surge in costs in the US and across the world, would cause just a “little disturbance”.Should Wednesday’s action prove as drastic as billed, businesses and consumers may struggle to reconcile this description with what they encounter.Liberation Day is the moniker coined by this administration. Liability Day might prove more apt. More