Donald Trump has declared he can use tariffs in a “much more powerful and obnoxious way”, as the UK and the EU seek urgent clarity on trade deals struck last summer. The US president’s comments came after a supreme court ruling that he had overstepped his legal authority to impose his “liberation day” measures last year.
On Saturday, Trump announced a new 15% global tariff, which is set to be collected from Tuesday. Keir Starmer’s spokesperson said the UK did not expect the new tariff to affect the majority of the UK-US economic deal agreed last year. However, it remains unclear whether the new tariffs will be at the 10% rate agreed last May, the 15% rate, or a customs default to pre-reciprocal day tariffs.
When asked if retaliatory tariffs were an option, the spokesperson said: “No one wants to see a trade war … But as I say, nothing is off the table at this stage.” The EU has paused ratification of its deal with the US for the second time in a month. Olof Gill, a commission spokesperson, said: “Full clarity on what these new developments mean for the EU-US trade relationship is the absolute minimum that is required.”
US shares fell on Monday, with the Dow Jones down 1.6%, the Nasdaq off 1.2%, and the S&P 500 down about 1%. The top US trade negotiator, Jamieson Greer, said deals already agreed “remain in place” and that the new 15% tariffs would not apply to countries with existing deals, including the UK and the EU.
However, confusion persists among businesses. Andy Haldane, president of the British Chambers of Commerce, said he believed the 15% tariffs would apply from Tuesday unless the government heard otherwise. The BCC calculated that the additional 5% tariff would increase levies on UK exports to the US by between £2bn and £3bn, which would have to be absorbed by exporters, importers, or customers.
