Donald Trump has confirmed the UK will be hit by 10 per cent tariffs on exports to the US, in a major blow to Britain’s economic growth.
The US President confirmed the measure in a provocative and bombastic statement in the White House Rose Garden on Wednesday at just after 9pm UK time.
The European Union will be charged a 20 per cent tariff rate on goods exported to the US, alongside dozens of other nations at differing rates, in a significant moment for global trade.
It comes after the National Institute for Economic and Social Research (NIESR) calculated that UK GDP growth would slump to around 0.6 per cent this year and virtually zero in 2026 as a result of 10 per cent tariffs, just days after Chancellor Rachel Reeves delivered the Spring Statement.
In a wide-ranging address, Trump said: “My fellow Americans, this is Liberation Day. April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again.”
He added: “This is one of the most important days in my opinion in American history. It’s our declaration of economic independence… with today’s action we are finally going to be able to make America great again, greater than ever before.”
Automobile tariffs
Trump claimed the tariffs would ensure the US could use “trillions and trillions of dollars to reduce our taxes and pay down our national debt, and it will all happen very quickly”.
He argued that the US had been “looted, pillaged, raped and plundered” by “foreign scavengers” and “ripped off for more than 50 years”, and confirmed his measure of 25 per cent tariff on all foreign made automobiles, with no exemption for UK cars entering the US.
The Republican President confirmed his approach to reciprocal tariffs, stating: “That means they do it to us, we do it to them. Can’t get simpler than that. It’s our turn to prosper.”
But he also revealed a list of countries which would be hit by a range of different amounts of tariffs, and suggested the US would be “kind” and “charge them approximately half of what they are charging us, so the tariffs will not be a full reciprocal”.
EU and business response
The move came as a blow to the UK government and wider economy, with current exports at £60bn worth of goods to the US each year, our largest export partner, including £7.6bn worth of cars last year.
The European Union (EU) is said to be drawing up a robust response package to be agreed upon on Thursday, while markets in London and Europe are expected to slump as investors take in the impact, according to AJ Bell’s head of financial analysis Danni Hewson, who warned: “In the immortal words of Nat King Cole, ‘There may be trouble ahead.’”
Rain Newton-Smith, director-general of the Confederation for British Industry (CBI), said the “announcements are deeply troubling for businesses and will have significant ramifications around the world”.
She urged the UK government to demonstrate a “cool and calm reaction, warning “retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices”.