BRITAIN is threatening tariffs on 8,000 US products including toilet seats — as Donald Trump’s trade war sent world economies down the pan yesterday.
A staggering $2.2trillion was wiped off stock markets with the Nasdaq suffering its biggest tanking since the start of Covid.
ReutersDonald Trump’s ‘Liberation Day’ tariffs have knocked a staggering $2.2trillion off global stock markets[/caption]
AFPA trader in New York buries his head in his hands as the markets plummet in the wake of US tariffs[/caption]
EPAA trader in South Korea looks as grim as the market figures behind her[/caption]
PM Sir Keir Starmer still hopes to do a deal with the President but has lined up US goods for import taxes within weeks.
Trump’s tariff blitz triggered a sharp sell-off of shares, with traders shocked by the size of levies imposed on even the US’s closest allies.
Furious governments threatened to whack tariffs on US imports.
The PM repeated his priority was to secure a trade deal with the US which would reduce or remove the ten per cent tariff imposed on all UK exports, and 25 per cent on cars and steel.
But, in a toughening of the Government’s stance, it is drawing up a list of 8,000 US products it could hit with retaliatory tariffs if no pact is agreed by May 1.
Business Secretary Jonathan Reynolds published a 417-page list of American products that could be clobbered.
Toilet seats are included, along with Harley-Davidson motorcycles, Jack Daniel’s and Jim Beam whiskey and Levi’s jeans.
US-made vacuum cleaners, sports shoes and chopsticks are also in our crosshairs. Sir Keir vowed: “Nothing is off the table.”
And at a Downing Street breakfast meeting, he told bosses of firms such as Bentley, Unilever and Airbus that the UK has a “range of levers at our disposal”.
Later at an event in Chesterfield, the PM said the UK was heading into a new era but that “we shouldn’t jump into a trade war”.
He added: “I need to act in the national interest. The choice before us is whether to jump into retaliatory action with both feet at the get-go, or continue with our calm approach to negotiate a trade deal to mitigate tariffs if we can.”
Yesterday the FTSE 100 slumped by 1.55 per cent to 8,474.7 points while the FTSE 250 fell by 2.33 per cent to 19,210.5 points.
Retailer JD Sports saw shares dropping by 7.89 power cent. Shell and BP also tanked.
Mr Trump announced his controversial tariffs in the White House Rose Garden on Wednesday.
Yesterday, referring to the US, he wrote on his Truth Social account: “The operation is over! The patient will be far stronger, bigger, better and more resilient than ever before.”
The tariffs imposed on the UK were at the lowest end of his sliding scale — in what was considered a Brexit dividend.
In Europe, subject to a 20 per cent tariff, France’s CAC 40 stock market closed down by 3.3 per cent while Germany’s DAX dropped three per cent.
German sportswear giant adidas tumbled by almost 12 per cent as it makes most of its shoes in Asia, hit by hefty tariffs. Rivals Nike and Puma suffered heavy falls.
The biggest pain was saved for Wall Street with shares crashing in the US’s most valuable companies — from banks to retail to tech. The S&P 500 fell by 4.13 per cent.
The Nasdaq slumped by 5.3 per cent — the biggest fall since the start of the pandemic.
Apple fell almost nine per cent, wiping $250billion off its value. It relies heavily on tech imports from China, India, Vietnam and Thailand, all subject to heavy tariffs.
Nvidia, the $2.5trillion chip company, saw seven per cent erased from its value.
Elsewhere, South Korea’s main share index slumped 0.7 per cent.
Sir Keir yesterday refused to rule out tax hikes later this year if reduced growth means Labour risks breaking its fiscal rules.
Business chiefs have been asked for their views over the next four weeks. Some warned that “two wrongs don’t make a right” and told the PM to hold off his own tariffs.
LEVIES FORMULA BAFFLES EXPERTS
By Martina Bet
PRESIDENT Donald Trump used a back-of-the-envelope maths formula to slap “reciprocal” tariffs on more than 100 countries.
In reality the numbers have little to do with what countries charge the US. The White House released a flashy formula with Greek algebra symbols — but it boiled down to a simple sum.
Officials took America’s goods trade deficit with each country, divided it by how much the US imports from them and then halved that number.
Trump did not use the formula for countries that buy more goods from the US than they sell, including the UK. They were charged ten per cent.
Deutsche Bank’s George Saravelos said: “Trump is focused on penalising countries with larger trade deficits in goods. It’s highly mechanical rather than a sophisticated assessment of tariffs.”
Despite tariffs on remote places such as Heard Island — only inhabited by penguins and seals — Russia was entirely exempt. US press secretary Karoline Leavitt argued existing sanctions on the country already “preclude any meaningful trade”.
Craig Beaumont, of the Federation of Small Businesses, said: “Retaliatory tariffs would double the damage at a time of burgeoning costs and taxes in our country.
“We are calling on the UK and US Governments for small and medium enterprises to be at the centre of a prosperity deal.”
The knock-on effect has seen digger giant JCB double the size of a factory being built in San Antonio, Texas.
CEO Graeme Macdonald said: “In the short term the tariffs will have a significant impact on our business. However, in the medium term our San Antonio factory will help to mitigate the impact.”
Whitehall sources expressed some relief that the UK was only hit with the ten per cent rate.
Ministers believe the actual rate should be four per cent which is the average tariff on US goods.
But the 25 per cent hit to UK car makers has put 25,000 jobs at risk. Trump adviser Sebastian Gorka said: “After Brexit, you’ve reaffirmed your independence, and I think that is being proven today by the special rate that has been afforded to the UK.”
Experts warned UK growth could take a 0.5 per cent hit in the coming years.
Thomas Pugh, economist at RSM UK, said the levies will be “not far off” wiping out Chancellor Rachel Reeves’ £10billion financial cushion.
He said: “The direct impact on the UK is likely to be in the 0.2 to 0.5 per cent of GDP range over the next few years.
“The impact will be bigger once the hit to the US and European economies becomes clearer and is taken into account.”
Two thirds of Brits think the tariffs will have a negative effect on the economy, a poll found.
A trade deal, ready to be signed by the US, could include lower digital services tax for tech firms in exchange for less severe tariffs.
Britain could review enforcement of its online harms rules as part of any agreement, it was claimed.
PAPM Sir Keir Starmer, with business leaders today, said his priority was to secure a trade deal with Trump which would reduce or remove the ten per cent tariff imposed on all UK exports and 25 per cent on cars[/caption]
The Mega AgencyTrump’s tariff blitz triggered a sharp sell-off of shares, with traders shocked by the size of levies imposed on even the US’s closest allies[/caption]
GettyBritain is even threatening to add tariffs to toilet seats[/caption]
But The Molly Rose Foundation wrote to Mr Reynolds saying it was “dismayed and appalled” by any willingness to bring children’s safety into tariff mitigation.
Germany’s economy minister Robert Habeck insisted that Trump will “buckle”. He said: “This pressure now needs to be unfolded, from Germany, from Europe in the alliance with other countries, and then we will see who is the stronger one in this arm wrestle.”
Canada’s new PM Mark Carney said the tariffs were “unjustified, unwarranted, and misguided”.
European Commission president Ursula von der Leyen said she was finalising counter-measures, adding: “We are in this together: if you take on one of us, you take on all of us. Our unity is our strength.”
Trump also slapped ten per cent tariffs on some of the most remote places on Earth including Heard Island and the McDonald Islands, an Australian territory in the Indian Ocean, which is only inhabited by penguins and seals.
Additional reporting by Jack Elsom and Noa Hoffman
HOW WE WILL BE HIT BY TARIFFS
PRICES IN SHOPS: If Britain can’t do a trade deal with the US, and is forced to impose retaliatory ten per cent tariffs, the price of everything from US jeans and bourbon to toilet seats and vacuum cleaners will jump.
Goods from elsewhere which were originally destined for the US could be redirected to the UK, and may be cheaper at first. But it would be bad news for British factories unable to compete.
INTEREST RATES: Global uncertainty will mean the Bank of England will be nervous about inflation returning and it could keep rates high.
JOBS: Around 25,000 in car manufacturing have already been put at risk by the tariffs on foreign auto imports, according to experts. Firms that have expanded into the US will be under intense pressure to cut costs and trim workforces.
TAX RISES AND SPENDING CUTS: Economists reckon Donald Trump’s trade tariffs will wipe out the Chancellor’s carefully managed financial buffers, which will mean Rachel Reeves will have to balance the books with even deeper spending cuts or tax rises.
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