Starmer admits UK will face Trump tariffs this week as US president sparks global recession fears: Live

Our political editor David Maddox and politics correspondent Archie Mitchell report on today’s events:

Some business groups have warned Sir Keir Starmer against follow the EU in unleashing retaliatory measures.

John Longworth, chairman of the Independent Business Network (IBN), warned that UK tariffs on the US would be “an act of self harm”.

He said: “Tariffs are primarily self harm unless they attack strategic industries. Our goods trade with the US is broadly in balance. We should seek trade arrangements asap and ignore the naysayers. It will cut inflation, help consumers and UK business.

“We should avoid the EU tariff war and stop protecting expensive EU producers. If we get involved in a tariff war it will cut economic growth even further and add to inflation = stagflation.”

Meanwhile, Marco Forgione, director general at the Chartered Institute of Export and International Trade, has suggested that it will result in major western democracies turning their backs on the US and working more closely together.

He told The Independent: “There is going to be a geo-political shift with Canada, EU, UK and Australia forming a closer trading partnership.

“That means the development of either a formal or informal collaboration. It won’t replace the US market but certainly regarding commodities could establish a new collaborative trading community.”

Reform UK leader Nigel Farage, who is a prominent supporter of the US president, said that tariffs “won’t be popular with anybody, not me either” but that retaliation would be “an act of self-harm”.

“What disappoints me more than anything is we had a massive opportunity in Trump’s first term to do a free trade deal with America,” he said.

“We didn’t do it because the Conservatives didn’t deliver Brexit, we weren’t free to do it, but we did negotiate nearly three quarters of the chapters that we needed to get to that position… But I do think we can sort this out.”

European stocks fell on Monday as concerns swept through financial markets, days before US President Donald Trump’s tariff plans are due to take effect.

London’s FTSE 100 was down more than 100 points during the lows of the day. At close, it had lost 76.04 points, or 0.88%, to settle at 8,582.81.

The sell-off was more pronounced for other top European indexes. Germany’s Dax fell 1.33%, and France’s Cac 40 tumbled 1.58%.

Experts said fears of an escalating trade war meant there was “nowhere to hide in the stock market” with a raft of global stocks caught up in the panic.

Kathleen Brooks, research director at XTB, said: “There is an air of capitulation in financial markets ahead of the April 2 reciprocal tariff announcement from the US.

“Tariff fears have deepened over the weekend, there has been no let-up from president Trump, who said that no country would be able to avoid his reciprocal tariffs. This dashed any hopes for a last-minute reprieve.

“There is nowhere to hide in the stock market as equities get caught up in the tariff headwinds, which is not helped by the fact that it is the last trading day of first quarter.”

The Federation of Small Businesses (FSB) said that 60 per cent of its members export to the US.

Tina McKenzie, policy chair of the FSB, said: “There is no skirting around the fact that tariffs are going to be a huge headache for small firms.

“Extra costs are the last thing businesses need, especially at a time where nine in 10 small and medium sized businesses (SMEs) believe exporting is important to the overall economy. With 59 per cent of small exporters currently exporting to the US, any disruptions to trade could have a huge ripple effect.”

British firms look set to be hit by Donald Trump’s tariffs after Downing Street acknowledged the UK was unlikely to be spared.

The US president is set to unveil sweeping import taxes on goods from countries around the world on Wednesday, an event Mr Trump has dubbed “liberation day”.

Sir Keir Starmer’s government has been trying to negotiate an economic deal with the US, which it is hoped could protect UK businesses from the worst impacts of Mr Trump’s plans.

But that will not be in place before Wednesday and trade talks alone are unlikely to be enough to exempt the UK from the president’s desire to impose tariffs on imports to the US from around the world.

The Prime Minister’s official spokesman said: “When it comes to tariffs the Prime Minister has been clear he will always act in the national interest and we’ve been actively preparing for all eventualities ahead of the expected announcements from President Trump this week, which we would expect the UK to be impacted by alongside other countries.

“Our trade teams are continuing to have constructive discussions to agree a UK-US economic prosperity deal.

“But we will only do a deal which reflects this Government’s mandate to deliver economic stability for the British people, and we will only act in the national interest.”

Asked whether the Government had given up hope of a UK-US deal being signed before the tariffs are announced, the spokesman said he is “not going to put a time frame on those discussions” but that they are “likely to continue beyond Wednesday”.

In a sign of the damage done by tariffs he British Chambers of Commerce (BCC) has estimated that almost two thirds (63 per cent) of businesses it represents will be hit by the new tariff war.

William Bain, head of trade policy at the BCC pointed that the Office for Budget Responsibility (OBR) last week warned that a trade war with the US will wipe out all the headroom chancellor Rachel Reeves had given herself in the spring statement leaving the government vulnerable to major events.

“Tariffs mean prices and costs will inevitably go up and this is a lose-lose scenario for consumers, businesses, and economic growth. But the imposition of more tariffs by the US does not mean we have reached the end of the road in terms of negotiations. Tariffs can be lifted at any time.”

The BCC and others are urging the UK government to push ahead with its talks on a trade deal with the US in an attempt to reverse the tariffs.

Any nation that treats the United States unfairly should expect to be targeted by tariffs, the White House said, two days before US President Donald Trump is expected to announce what he has said will be sweeping, reciprocal tariffs.

“Any country that has treated the American people unfairly should expect to receive a tariff in return on Wednesday,” White House spokesperson Karoline Leavitt told reporters, declining to give any further details.

Donald Trump’s decision to impose a 25 per cent tariff on UK steel has sparked concerns about the future of Britain’s struggling steel industry.

However, Oliver Chapman, Group CEO of OCI, believes the impact may not be as severe as feared—and could even bring unexpected benefits.

“I don’t believe that these tariffs will have as much of an impact on the UK economy as people think,” Mr Chapman said.

He pointed out that the UK is a net importer of steel, buying $7.3 billion worth worldwide while exporting $5.4 billion. Only 9 per cent of UK steel exports go to the US, with 70 per cent heading to Europe.

The tariffs mainly target high-grade steel used in military, construction, and automotive industries. Mr Chapman suggested that Trump could be using the move as a strategic play.

“These tariffs are only on £370 million worth of imports and therefore won’t hit the UK hard. Trump may be signalling that if the UK backs the US on this, it will receive support in return.”

He also argued that the shift could strengthen UK-EU trade. “Because of Brexit, this could indirectly benefit the UK by increasing steel exports to Europe instead of the US.”

While some fear higher steel prices, Mr Chapman dismissed those concerns. “Why would prices go up? The UK will simply export more steel to Europe. If anything, prices could stay the same or even fall.”