Trump tariffs newest: Starmer insists UK ‘ruling nothing out’ as president prepares to spark world commerce struggle
Sir Keir Starmer has said the UK is “preparing for all eventualities” and “ruling nothing out” as global stock markets nervously await the imposition of Donald Trump’s so-called “Liberation Day” import tariffs.
Asian and European stocks stuttered on Wednesday morning amid fears from investors and world leaders that Mr Trump’s plans could intensify a global trade war. Germany saw the biggest dip as the DAX fell 1.3 per cent by midday, with the UK’s FTSE100 also down 0.8 per cent. Both recouped some losses in the early afternoon.
The White House has provided no details about the size and scope of Mr Trump’s trade barriers, which he is set to announce at 9pm, after which reciprocal tariffs on countries imposing duties on US goods will immediately take effect.
As analysts at the leading IPPR think-tank warned that tariffs could “completely destabilise the UK car manufacturing industry” and put 25,000 UK jobs at risk, Sir Keir told MPs that a trade war with the US is “in nobody’s interest”.
“The country deserves – and we will take – a calm, pragmatic approach,” Sir Keir told the Commons, adding: “Our decisions will always be guided by our national interest, and that’s why we have prepared for all eventualities – and we will rule nothing out.”
Reeves argues US tariffs on UK would be ‘less relevant’ to UK than global tariffs
Rachel Reeves has argued that US tariffs on the UK would be “less relevant” to the UK than global tariffs.
The chancellor told the Treasury Committee today: “Obviously we are looking ourselves at a whole range of scenarios and preparing for all different eventualities.”
She continued: “The biggest impact comes from global tariffs, not just UK. The next biggest comes from retaliation. Actually the specific tariffs on the UK are less relevant on growth and inflation impact than global impact.”
She added: “Even if we are able to secure an agreement with the US, that we very much want to achieve and are working hard to achieve, even if that’s possible, that doesn’t mean we are out of woods and not impacted by tarriffs.”
Comment | It will take Starmer’s greatest skill to deal with Trump’s ‘Liberation Day’ – but victory is possible
Our political columnist Andrew Grice writes:
When Donald Trump confirms that he is imposing tariffs on imports from the UK, it will appear to be a huge setback for Keir Starmer. Yet, the prime minister can still turn a diplomatic defeat into victory.
Until recent days, Starmer had high hopes of freeing the UK from the worst effects of Trump’s “Liberation Day.” A hastily struck US-UK “economic prosperity deal,” based on advanced technology and services, was ready to go and would have given the UK a carve-out from most Trump tariffs, UK officials told me.
It would have been a coup for Starmer. Instead, his softly softly strategy on Trump will now be called into question – both at home, where he will be accused of not standing up to the US president, and abroad, where natural allies like the EU and Canada will urge the UK to join their retaliation against the US.
At some points during the hasty negotiations, US officials hinted they were happy with the outline deal on the table. But the only view that mattered was Trump’s, and even his closest advisers didn’t know which way he would jump.
As ever, events are more about Trump’s vanity than the eventual outcome. This is surely why he didn’t sign off on the UK agreement. “He wanted his ‘shock and awe’ moment,” one Whitehall source told me.
Read more insights here with Independent Premium:
Reeves issues warning to Trump: ‘It would not be the right policy to increase tariffs on us’
Rachel Reeves has warned “it would not be the right policy to increase tariffs on us” as she is questioned over Donald Trump’s tariffs.
The chancellor told the Treasury Committee today: “I do recognise the concerns the US has, their concerns are about a global trade imbalance… The UK is not cause of those problems… So it would not the right policy to increase tariffs on us.”
Reeves insists ‘talks are ongoing’ with US over tariffs
Rachel Reeves has insisted that “talks are ongoing” with the US as she is grilled over the prospect that Donald Trump’s tariffs are soon to be imposed on the UK.
Answering questions before parliament’s Treasury Committee, the chancellor also said: “I do believe in free trade. The UK has balanced trade with the US. When our prime minister Sir Keir Starmer was in Washington meeting with president Trump, they agreed to start a rapid dialogue on an economic agreement. That work is ongoing at the moment. We do not want to see trade barriers go up. Indeed we want to see trade barriers fall.”
Trump’s tariffs in numbers: The biggest losers amid escalating US trade war
Our data correspondent Alicja Hagopian has created this interactive map showing how countries around the globe are likely to be impacted by Donald Trump’s tariffs.
Read more details about the anticipated global impact of the looming US import taxes in this report:
‘I can’t recall a situation where the stakes were this high and the outcome so unpredictable’
The lack of clarity on which tariffs the US could impose ahead of Donald Trump’s announcement tonight is intensifying analysts’ and policymakers’ anxiety over what may lie ahead.
“I can’t recall a situation where the stakes were this high and yet the outcome was so unpredictable,” Steve Sosnick, chief strategist at Interactive Brokers, told Reuters.
“The devil is going to be in the details and nobody knows the details.”
Trump tariffs will be negative the world over, warns European bank chief
Donald Trump’s tariffs will be negative for all, the president of the European Central Bank has warned.
“It will be negative the world over and the density and the durability of the impact will vary depending on the scope, on the products targeted, on how long it lasts, on whether or not there are negotiations,” Christine Lagarde told Irish radio broadcaster Newstalk.
‘The US is the biggest loser’: What readers are saying about Trump’s tariffs
While Trump has suggested all nations, including the UK, will be affected, specifics remain unclear. The trade war is expected to have wide-reaching consequences on global markets, businesses, and consumers.
Independent readers have expressed concern that the tariffs will raise prices, worsen the cost-of-living crisis, and destabilise the UK economy. Some suggest that UK leaders should focus on taxing US tech giants rather than avoiding tariffs, while others warn of the historical impact of similar tariffs, like the 1930 Smoot-Hawley Tariffs.
However, a few readers see potential opportunities in the chaos, suggesting redirected trade flows and economic shifts could benefit certain industries and reduce government borrowing costs.
Italy’s government and businesses warn of heavy impact of US tariffs
Italy’s Prime Minister Giorgia Meloni and its top business lobby warned today that looming US tariffs would have a major impact on the country’s exports and already struggling economy.
“It is clear that the introduction of new tariffs would have heavy repercussions for Italian producers”, Meloni said while hosting a prize-giving ceremony for Italian cuisine in Rome.
Meloni added that she did not rule out “adequate responses” to protect the exports of the euro zone’s third largest economy, though she did not elaborate.
Italy posted a trade surplus with the US of €39billion ($42.14 billion) in 2024, the third largest in the 20-nation euro area, Eurostat data shows.
Earlier on Wednesday, business association Confindustria said Italy’s economy would grow by 0.6 per cent this year, half the government’s official target and down from a 0.9 per cent forecast made by the group in October.
The economy expanded by a modest 0.7 per cent in both 2024 and 2023.
It eked out 0.1 per cent growth in the fourth quarter of 2024 from the previous three months, after stagnating in the third quarter. Most analysts expect no significant pick-up in the near term.
Confindustria said that while its forecasts incorporated already-announced US tariffs on steel and aluminium and what it called “record levels of uncertainty” on trade policy, they did not factor in the effects of an escalating trade war.
In a worst case scenario, with permanent 25 per cent US tariffs on all imports, rising to 60 per cent for China, and retaliatory measures against U.S. exports, Italy’s growth would fall to around 0.2 per cent this year, it said.
Full report: Starmer ‘offers US tech firms tax cut’ in last-ditch bid to dodge Trump tariffs
Sir Keir Starmer has reportedly offered big US tech companies a major tax break in a last-ditch bid to dodge Donald Trump’s damaging tariffs.
The prime minister is prepared to lower the rate of the government’s digital services tax (DST) in a bid to win concessions from the president as a global trade war looms, it has emerged.
There is reportedly a deal on the table ready to be signed, covering areas such as artificial intelligence and other future technologies. But The Guardian on Wednesday also reported the UK has offered significant changes to the DST. The move would reportedly see Britain lower the headline rate of the tax, in a major boost to major American firms such as Amazon, Facebook owner Meta and Google owner Alphabet, while at the same time applying the levy to companies from other countries.
Our political correspondent Archie Mitchell has more details:
