Major blow for UK in Trump’s escalation of trade war after Don announces 90-day pause on tariffs for most countries
PRESIDENT Donald Trump has announced a 90-day tariff pause for most countries who "did not retaliate" with reciprocal levies - but it means a major blow for the UK.
Britain was hit with a baseline 10% import tax on nearly all UK products entering the US, as well as the previously announced 25 percent levies on aluminium, steel and cars.
And it has still not improved even though Trump lowered tariff rates for almost all other countries except for China, whose imports have been penalised with 125% levies.
After Trump's brutal tariffs came into effect today, London's FTSE 100 fell again, wiping out most of Tuesday's gains.
The FTSE 100 share index closed at a fresh 13-month low on Wednesday after European markets dropped further.
The index of top UK stocks finished down 2.92%, or 231.05 points, at 7,679.48 for the day.
read more on the trade war
Experts predict that fuel prices, mortgages, pension funds and the cost of goods are all set to be impacted in Britain amid fears of a recession.
The Sun has revealed some of the ways the trade war will affect you, which can be found here.
Speaking after the tariffs kicked in today, Sir Keir Starmer said Britain must look at "co-ordinating better across Europe" to protect its economy.
Asked whether the 10% rate hitting all British goods would be in place forever, the Prime Minister told ITV's Peston: "Look, I don't know.
"We are negotiating and we hope to improve the situation, but what I mean by this is that simply thinking that any change in the rates, or any deal is going to be enough, to my mind is wrong.
"Because just as we've done with defence and security, where we've recognised it's a changing world, we've got to step up and act differently.
"In that case with defence spend, co-ordinating better across Europe, so too with trade and the economy."
Britain has been spared from the higher tariff rates hitting others and has resisted taking immediate retaliatory action - unlike the EU, which has voted to impose countermeasures on some US goods.
Sir Keir had declined to officially back a "Buy British" campaign in response to Trump's tariffs proposed by the Lib Dems.
The PM's spokesman said the UK is "an open-trading nation" and Downing Street was "not going to tell people where they buy their stuff".
However, ministers are reportedly reviewing procurement rules to give an advantage to British firms bidding for government contracts, according to the BBC.
No10 has repeatedly stressed it will not rush into retaliatory measures despite the concern of business owners.
Starmer is reported to have told senior MPs that the UK shouldn't "jump in with both feet" and will retaliate only "if necessary".
Ministers still hope an economic agreement with Washington can be reached to soften the blow of the levy, which strikes UK goods, along with a 25% import tax on cars and separate ones for steel and aluminium.
But the Government will also seek to strengthen trade ties with other countries, including by trying to rebuild ties with the European Union.
Are we heading towards recession?
By Ashley Armstrong, Business Editor and Ryan Merrifield, Senior News Reporter
Stock markets can often seem separate to everyday life and the real economy.
However, the flashing red lights of tumbling share prices are a warning about investors’ views on the economy.
They have tanked because traders are betting Trump’s trade wars will damage companies’ profits and make them unlikely to invest, hire or expand.
The knock-on will be job cuts, which will lead to weakened consumer confidence and depress spending.
Larry Fink, boss of Blackrock, the world’s biggest asset manager, suggested the US may already be in recession and said the economy was “weakening”.
Analysts at Wall Street bank JP Morgan have estimated a 60 per cent chance of a global downturn while rival bank Goldman Sachs has started a “countdown to recession” and given it a 45 per cent probability.
Shares in banks, including HSBC and Barclays, have plunged by levels not seen since the financial crisis.
Similarly, commodity prices including copper and oil have slumped by 15 per cent as investors bet on lower global demand in the event of a recession.
Meanwhile, Chancellor Rachel Reeves signed a statement for around £400 million of deals with India today as part of talks aimed at securing a deal with New Delhi.
Reeves and her Indian counterpart Nirmala Sitharaman announced the package of £128 million of new export deals and investments, as well as recently agreed deals worth £271 million after meeting in London.
The Chancellor said the Government was going "further and faster" to stimulate growth in a "changing world" by negotiating trade deals with countries including India.
Earlier, she told the Financial Times that she would seek to negotiate such an agreement when she visits Washington at the end of April for the International Monetary Fund's spring meeting of global finance ministers.
Read More on The Sun
She also said a UK-EU summit on May 19 would be a chance "to refresh our relationship and make it easier for businesses to trade".
"Many of the developments, whether it is Russia's invasion of Ukraine or the challenges in global trade at the moment, mean that there's an even greater imperative to improve our trading relationships with Europe," she said.