Trump tariffs latest: Starmer insists UK ‘ruling nothing out’ as president prepares to spark global trade war

Rachel Reeves argued that US rates on the UK would be ‘less relevant’ to the UK than global rates.

The Chancellor told the Treasury Committee today: “It is clear that we are looking at a whole series of scenarios and preparing for all different events.”

She continued: “The biggest impact comes from world tariffs, not just the UK. The next biggest coming from retaliation. Actually, the specific rates on the UK are less relevant to growth and inflation impact than the global impact.”

She added: “Even if we can obtain an agreement with the US, which we want to achieve a lot and work hard to achieve, even if possible, it does not mean that we are out of the forest and are not affected by Tarriffs.”

Our political columnist Andrew Grice write:

When Donald Trump confirms that he is imposing rates on the UK import, it will be a major setback for Keir Starmer. Yet the prime minister can still make a diplomatic defeat in victory.

Until recent days, more remarked hope to free the UK from the worst effects of Trump’s “Liberation Day”. A hasty US-UK ‘Economic Wealth Agreement’, based on advanced technology and services, was ready to go and would have given the UK a notch of most Trump tariffs, the British officials told me.

It would have been a coup for starter. Instead, his soft gentle strategy on Trump will now be called into question – both at home, where he will be accused of not standing up with the US president and abroad, where natural allies such as the EU and Canada will request the UK to join their retaliation against the US.

At some points during the hasty negotiations, US officials hinted that they were satisfied with the exposition of the table. But the only view that mattered was Trump, and even his closest advisors didn’t know what way he would jump.

As always, events are more about Trump’s vanity than the ultimate outcome. This is surely why he did not report to the British agreement. “He wanted his” shock and awe “moment,” a source of Whitehall told me.

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Rachel Reeves warned “it would not be the right policy to raise rates on us” because she was questioned about Donald Trump’s rates.

The Chancellor told the Treasury Committee today: “I acknowledge the concerns the US has, their concerns about a global imbalance in the trade … The UK is not the cause of these problems … so it would not be the right policy to raise rates on us.”

Rachel Reeves insisted that ‘talks are underway’ with the US, as she is roasted over the prospect of Donald Trump’s rates being imposed on the UK soon.

The Chancellor also answered questions before Parliament’s Treasury Committee and said: ‘I do believe in free trade. The UK has a balanced trade with the US. When our Prime Minister Sir Keir Starmer in Washington met with President Trump, they agreed to start a quick dialogue about an economic agreement. That work at the moment does not want to see.

Our data correspondent Alicja Hagopian created this interactive map that shows how countries around the world are likely to be influenced by Donald Trump’s rates.

Read more details about the expected global impact of the imminent US import tax in this report:

The lack of clarity on the rates the US can impose tonight before the announcement of Donald Trump is to strengthen the anxiety of analysts and policymakers about what’s ahead.

“I can’t remember a situation where the game was so high, and yet the result was so unpredictable,” Steve Sosnick, main strategist at Interactive Brokers, told Reuters.

“The devil is going to be in the details and no one knows the details.”

Donald Trump’s rates will be negative for everyone, the president of the European Central Bank has warned.

“It will be negative worldwide, and the density and the durability of the impact will depend on the scope, on the products that are directed, on how long it lasts, whether there are negotiations or not,” Christine Lagarde told Irish radio broadcaster Newstalk.

While Trump suggested that all countries, including the UK, be affected, the details remain unclear. The trade war is expected to have wide consequences for global markets, businesses and consumers.

Independent Readers have expressed concern that rates will raise prices, exacerbate the vitality crisis and destabilize the British economy. Some people suggest that British leaders should focus on the tax of US technical giants rather than avoiding rates, while others warn of the historical impact of similar rates, such as the 1930 Smoot Hawley rates.

However, a few readers see possible opportunities in the chaos, suggesting that redirecting trade flow and economic shifts can benefit certain industries and lower government borrowing costs.

Italy’s Prime Minister Giorgia Meloni and his top lobby fog warned today that threatening US rates would have a major impact on the country’s exports and already struggling economy.

“It is clear that the introduction of new rates would have heavy consequences for Italian producers,” Meloni said while offering a prize -giving ceremony for the Italian kitchen in Rome.

Meloni added that she did not exclude “sufficient reactions” to protect the export of the third largest economy of the eurozone, although she did not expand.

Italy placed a trade surplus with the US of € 39 billion ($ 42.14 billion) in 2024, the third largest in the euro area of ​​20 nations, it appears that the Eurostat data.

Earlier Wednesday, the Business Association Confindustria said the economy of Italy would grow by 0.6 percent this year, half of the government’s official target and lower than a 0.9 percent forecast the group made in October.

The economy expanded with a modest 0.7 percent in 2024 and 2023.

This exerted the 0.1 percent growth in the fourth quarter of 2024 of the previous three months, after stagnating in the third quarter. Most analysts do not expect any significant picks in the short term.

Confindustria said that although the predictions already recorded, we announced our rates on steel and aluminum and what it called “record levels of uncertainty” on the trade policy, they did not take into account the effects of an increasing trade war.

In a worst case, with a permanent US rates on all imports, rising to 60 percent for China, and retaliation against US exports, the growth of Italy would fall to about 0.2 percent this year, it says.

Sir Keir Starmer allegedly offered large US technical companies a major tax cut in a last attempt to avoid Donald Trump’s harmful rates.

The prime minister is prepared to lower the government’s tax on digital services (DST) in an attempt to win concessions of the president as a global trade war, this has emerged.

According to reports, there is an agreement on the table ready to be signed, covering areas such as artificial intelligence and other future technologies. But The guardian Wednesday also reported that the UK had offered significant changes to the DST. According to the move, Britain would reduce the main rate of the tax, in a big boost for major US firms such as Amazon, Facebook owner Meta and Google owner Alphabet, and at the same time apply the levy to companies from other countries.

Our political correspondent Archie Mitchell have more details: