US tariffs hit UK exports

British goods sold to the United States will face a new tax of 10 per cent, after President Donald Trump announced sweeping tariffs on imports from around the world.

Trump announced the tariffs at the White House on 2 April, which he called Liberation Day. Countries that sell much more to the United States than they buy face far higher rates.

Britain escapes the worst

Britain was given the lowest rate of 10 per cent, because the United States sells about as much to Britain as it buys. The European Union faces a rate of 20 per cent, and China 34 per cent, on top of earlier tariffs.

A 25 per cent tariff on imported cars, announced last week, also takes effect this week. Steel and aluminium imports already face a 25 per cent tariff.

Car makers worried

The car tariff is a particular blow for Britain's car industry. The United States is the biggest single market for British-made cars after the EU, and companies such as Jaguar Land Rover, which has factories in the Midlands, export large numbers there.

Industry leaders have warned that jobs could be at risk if the tariffs remain in place.

The government's response

The Prime Minister, Keir Starmer, said Britain would respond calmly and would not retaliate for now. The government is negotiating an economic deal with the United States, which it hopes will lead to lower tariffs.

The Business Secretary, Jonathan Reynolds, said the government would consult businesses on possible responses.

Markets fall

Stock markets around the world have fallen sharply, amid fears that the tariffs could lead to a global trade war and push the world economy into recession. Economists have warned that higher prices in the United States could also push up inflation there.

Why tariffs?

Trump says the tariffs will protect American jobs and bring manufacturing back to the United States. He argues that other countries have taken advantage of the United States for decades.

Critics say the tariffs will raise prices for American consumers and hurt businesses that rely on imported parts.

What it means for Britain

The Office for Budget Responsibility warned last month that a global trade war could significantly reduce growth in Britain. The Chancellor, Rachel Reeves, has limited room to respond, having set out tight spending plans.

Exporters say they need certainty about future trading arrangements.