Trump tariffs reside: UK corporations warn commerce battle will ‘wreak havoc’ as European markets set to plunge

Shevaun Haviland, director general of the British Chambers of Commerce, has said Donald Trump’s imposition of tariffs is a “lose-lose situation for everyone”.

She said: “The Government has kept a cool head so far and must continue to negotiate. This is a marathon not a sprint, and getting the best deal for the UK is what matters most.

“But no-one will escape the fallout from these decisions, there will be an increased risk of trade diversion, and it will wreak havoc on businesses communities across the world. Orders will drop, prices will rise, and global economic demand will be weaker as a result. This is a lose-lose situation for everyone.”

Prime Minister Sir Keir Starmer told business chiefs in Downing Street that “clearly there will be an economic impact” from Donald Trump’s tariffs but the Government would respond with “cool and calm heads”.

It comes after Donald Trump slapped a 10% tariff on US imports of UK goods.

European stock futures have plummeted the morning after Donald Trump unveiled his tariffs.

EuroSTOXX50 and DAX futures both fell around 2.3 per cent 06:58am, while FTSE 100 futures were down around 1.7 per cent.

On the back of president Trump’s latest tariff update, analysts at Barclays are foreseeing a risk to recession in the US this year – and for inflation to rise beyond four per cent.

The higher-than-expected tariff rating across the board is still pending legal challenges, retaliatory escalations and other factors, so could yet change, but their new assessment suggests a “high risk” the US enters a recession, while job losses increase.

The report read: “We estimate that higher tariffs will boost price and exert a drag on activity.

“This is because tariffs raise the price of final and intermediate imported products, adversely affecting domestic consumers; raise the cost of investment in equipment and infrastructure; generally result in retaliation from other countries, which hurts exporters; and are associated with trade policy uncertainty, which causes businesses to delay capex investment and hiring. In the face of weaker growth in activity and employment, the unemployment rate tends to increase.”

Japan’s Nikkei 225 looks the worst-hit of the overnight markets in Asia, dropping a full 3.28 per cent – and that’s after recovering some earlier losses.

The Hang Seng and the Shanghai Composite are likewise in the red but equally striking is the American markets dropping sharply in after-hours trading.

The futures show the anticipated market prices upon opening and each of the Dow Jones Industrial (-2.2 per cent), the S&P500 (-3 per cent) and the Nasdaq (-3.56 per cent) are poised to open significantly lower later today.

Of course there’s time for that to alter somewhat, as industries and investors alike start to digest the possible impact of Trump’s announcements.

Donald Trump yesterday slapped a whopping 50 per cent tariff on the southern African nation of Lesotho, along with French territory Saint Pierre and Miquelon

.Lesotho earlier said it was “shocked” by comments made by Mr Trump, who last month claimed “nobody has ever heard of” the country.

The US imported $237.3m worth of goods from the small landlocked African nation in 2024, up 4.7 per cent from 2023, according to government data.

The US goods trade deficit with Lesotho last year

Donald Trump yesterday slapped a 46 per cent tariff on Vietnam, which the US claimed was one of the worst offenders based on a government tally of the levies imposed on American goods.

The new levies could significantly dent Vietnam’s goal of boosting growth to at least 8 per cent this year, according to Bloomberg News.

Nonetheless, Vietnam’s prime minister Phạm Minh Chinh argued that the growth target for this year will remain unchanged. He said the government would set up a task force to deal with the US tariffs.

Vietnam on Monday had slashed tariffs on a range of imports, from liquefied natural gas to agricultural products.

India’s benchmark indexes opened lower this morning after US president Donald Trump slapped 26 per cent tariffs on imports from the South Asian nation, but a temporary exemption of pharmaceutical products helped soften the blow.

The Nifty 50 was down 0.60 per cent at 23,192.40, while the BSE Sensex fell 0.61 per cent to 76,153.68.

Mr Trump’s tariff announcement on India is part of his plan to impose a 10 per cent baseline tariff on all trade partners from 5 April, with higher duties on dozens of other countries, including 34 per cent on China from 9 April.

“The tariffs are significantly higher than anticipated and will disrupt global trade and, therefore, global growth,” said Ankita Pathak, macro strategist and global equities fund advisor at Ionic Asset.

“This is likely to seep into domestic growth, earnings and consequently valuations,” he said.

US treasury secretary Scott Bessent has warned trading partners to not retaliate against Donald Trump’s sweeping tariffs that could send the world economy into a tizzy.

“My advice to every country right now is, do not retaliate,” Mr Bessent told Fox News.

“Sit back, take it in, let’s see how it goes. Because if you retaliate, there will be escalation,” he warned. “If you don’t retaliate, this is the high watermark.

“China this morning urged the US to roll back the tariffs and properly resolve differences with trading partners through equal dialogue.

China firmly opposes this and will resolutely take countermeasures to safeguard its rights and interests, the commerce ministry said.