Donald Trump said Sir Keir Starmer was ‘very happy’ with how the US treated the UK on tariffs – as he pushed the world to the brink of a full-scale trade war.
Stock markets took a £2trillion hit yesterday after the US president slapped huge tariffs on America’s trading partners, stoking widespread fears of a recession.
He imposed 10 per cent ‘reciprocal tariff’ on the UK – but hit the rest of the world much harder – with the European Union facing a 20 per cent charge.
The rout was a devastating blow to millions of British savers who have money tied up in shares through their pensions, Isas and other investments.
Keir Starmer took the first step towards retaliating yesterday as he warned there would ‘clearly be an economic impact from the decisions the US has taken both here and globally’.
The Prime Minister said he had made ‘big progress’ towards a trade deal with Mr Trump which could mitigate the impact of the tariffs and he remained focused on securing a deal, warning that ‘nobody wins in a trade war’.
However, speaking outside Air Force One on Thursday evening, Mr Trump said Sir Keir had taken the tariffs ‘really well’.
He said, when initially asked if he had given his approval to Starmer’s Chagos Islands deal: ‘We are talking to the Prime Minister about it [chagos deal] and we will see how that turns out.
President Donald Trump holds ‘The Trump Card’ as he speaks with journalists onboard Air Force One en route to Miami on Thursday
Keir Starmer (pictured) took the first step towards retaliating as he warned there would ‘clearly be an economic impact from the decisions the US has taken both here and globally’
Mr Trump read many of the tariffs off the chart during the rambling press conference
‘We have a very good dialogue and I think he was very happy about how we treated them on tariffs.’
But, in a hardening of the UK’s position, Sir Keir set a May 1 deadline for a consultation on imposing tit-for-tat tariffs and published a 417-page dossier of US goods that could be hit, which included everything from golf clubs to dolls.
Sir Keir warned there was unlikely to be a full return to trading patterns of the past, saying that Mr Trump’s approach was ‘not just a short-term tactical exercise, it is the beginning of a new era’.
Traders watched the unfolding ‘nightmare on Wall Street’ in horror yesterday after analysts said Mr Trump had ‘detonated the most aggressive trade shock the market has seen in decades’, unveiling tariffs that went further than experts had feared.
But the President seemed unmoved last night, telling reporters as he left the White House for a Florida golf club: ‘The markets are going to boom, the stock is going to boom, the country’s going to boom and the rest of the world wants to see is there any way we can make a deal.
‘They’ve taken advantage of us for many, many years. Many years we’ve been on the wrong side of the ball and I tell you what, I think it’s going to be unbelievable.’
Last night he claimed that the UK was happy with its tariff treatment.
Targeted countries could retaliate with tit-for tat tariffs that experts warned would unleash a ‘spiral of doom’ and drag Britain, and the world, into a recession.
Household names suffered huge drops, with Apple boss Tim Cook, who attended Mr Trump’s inauguration, seeing more than £200billion wiped off the value of his company due to its reliance on Chinese production.
Mr Trump invited one blue-collar worker up on stage to endorse his tariff approach
Donald Trump confirmed that the UK will not escape the pain of levies he claims will restore ‘fairness’ in global trade
During a speech in the White House’s Rose Garden on Wednesday evening, Mr Trump imposed a blanket 10 per cent tariff on most goods from all countries. But some nations face even steeper levies, depending on the size of their trade deficit with the US.
Asian countries were hit hardest, with China, Vietnam and Japan facing tariffs of 34 per cent, 46 per cent and 24 per cent respectively.
Despite the UK getting off relatively lightly, receiving the lowest levy of 10 per cent, business minister Jonathan Reynolds warned that Mr Trump’s tariffs still pose a threat to Britain through the impact on global trade.
Ministers here are considering potential bailouts for the worst-hit sectors, with experts warning that 25,000 jobs could be at risk just in the car industry, which was hit with 25 per cent tariffs.
Kemi Badenoch urged the PM to move faster in striking a deal with the US. The Tory leader said history showed Mr Trump’s tariffs ‘will not make the US wealthier but they will make all of us poorer’.
Mr Trump timed his Rose Garden speech for after the markets had closed on Wednesday, so he did not have to see stocks plunge while he delivered his ‘make America wealthy again’ policy.
That meant markets reacted ‘violently’ to the news on opening yesterday. In London, the FTSE 100 index of blue-chip stocks fell 1.5 per cent and the domestically focused FTSE 250 slumped 2.2 per cent.
Germany’s Dax index was down 3 per cent and France’s CAC 40 dropped 3.3 per cent. Wall Street, however, was worst hit. The benchmark S&P 500 Index fell almost 5 per cent and the Dow Jones Industrial Average dropped nearly 4 per cent.
The tech-focused Nasdaq Composite tumbled more than 5 per cent and suffered its worst performance since the early days of the Covid-19 pandemic.
The first of eight pages of reciprocal tariffs that the White House announced during Wednesday’s event in the Rose Garden
Keir Starmer had already acknowledged that his desperate efforts to secure an exemption would be snubbed
Mr Trump appeared to have deliberately waited until markets were closed to make his announcement
An index tracking global stocks plummeted 3.3 per cent, wiping around £2trillion off its market capitalisation, analysis by UK stockbroker Quilter showed.
Fears of recession sent the oil price tumbling with West Texas Intermediate – the main US benchmark – down more than 7 per cent to as low as $66 a barrel.
The London benchmark – Brent Crude – fell more than 5 per cent to below $70 a barrel. Nigel Green, CEO of global financial advisory deVere Group, said: ‘This is how you sabotage the world’s economic engine while claiming to supercharge it.
‘It’s a seismic day for global trade. Trump is blowing up the post-war system that made the US and the world more prosperous, and doing it with reckless confidence.
‘Tariffs are taxes – plain and simple. These tariffs will
push prices higher on thousands of everyday goods – from phones to food – and that will fuel inflation at a time when it is already uncomfortably persistent.’
Shares in Apple plunged more than 9 per cent. The tech giant makes 90 per cent of its products in China.
Amazon shares fell 9 per cent as many of the products sold directly by the online retailer are also sourced in China. Jeff Bezos’s company is also vulnerable to changes in consumer behaviour.
Nike was hit hard, as Americans are major buyers of its trainers and sportswear, which are made in Asian countries facing the steepest tariffs. Shares dropped more than 14 per cent.
Luxury groups listed in Paris including LVMH, the owner of Louis Vuitton, and designer Christian Dior, both saw their stock plummet 5.6 per cent on fears that a recession will discourage even wealthy shoppers.
Stephen Innes of SPI Asset Management said that Trump had ‘detonated the most aggressive trade shock the market has seen in decades’. Olu Sonola, head of US economic research at Fitch Ratings, said: ‘Many countries will likely end up in a recession.’
And veteran City commentator David Buik added: ‘Markets hate uncertainty and today they have it in spades. The market has no idea whether these are Trump’s opening shots.’
