Trump tariffs latest: Starmer insists UK ‘prepared for all eventualities’ as fears over trade war grow

As the world economy braces for Donald Trump’s unveiling of a swathe of tariffs, some country leaders will be fearing the worst after Washington singled out a “dirty 15” list of nations.

Although not naming the countries, treasury secretary Scott Bessent said the group of nations traded heavily with the U.S. and had high tariffs on U.S. goods, plus held non-tariff barriers such as domestic-content production rules.

My colleague Alex Croft has more details in this report:

Donald Trump’s tariffs will push up prices for US shoppers because retailers are operating on “wafer-thin margins”, the chief executive of the luxury grocer Fortnum & Mason has warned.

Tom Athron told The Telegraph: “Ultimately it will be the consumer who pays. No one wins in a trade war. All that happens is that prices go up and productivity falls. I think it’s really disappointing that we find ourselves in this situation.”

Mr Athron said it was “too early to say” what the specific impact would be on Fortnum & Mason.

In his latest column, our chief business commentator James Moore writes:

Donald Trump is characterising it as “Liberation Day”. The rest of the world is scratching its collective head and wondering how the most destructive trade policy the US has ever embarked on will end – and how much damage it will do to the global economy.

It’s still not clear how this “liberation” will work or what form it will take. Will the tariffs be Trump’s favoured 25 per cent? Will they land on top of the levies already imposed? How will those charged with collecting at America’s ports and border crossings cope? Who knows or dares to ask?

The potential chaos will be mitigated at first because of the protective measures taken by those affected. While some – especially on Wall Street – viewed his victory with rose-tinted spectacles, importers in the US were much more sanguine and took steps to prepare for the worst.

They stepped on the gas. The net result of this can be seen in the numbers. Trump’s attempt to reduce the US trade deficit resulted in it jumping to a record $131.4bn in January 2025, up from a shortfall of $98.1bn in December 2024. The irony could hardly be more painful. Of course, that will unwind over time, and Trump will doubtless use the fall in the deficit when it does to claim the policy is working.

But his trade H-bomb will result in fallout over the US as much as it does over the rest of the world and not just by requiring American consumers to pay more for the goods they buy or hiking the costs of US businesses which import raw materials from overseas.

Here is some PMQs analysis from our political editor David Maddox:

The Tory leader made a lot of trying to cosy up to the new Trump administration and her friendship with vice president JD Vance soon after the inauguration.

So it may not be entirely surprising that she wants to steer clear of the subject of US tariffs on the UK and the rest of the world with the possibility of a trade war.

Earlier this week she also admitted that she had made no representations to her American allies to try to help Britain avoid the tariffs.

As a former trade secretary who did not try to get a US trade deal the whole subject is becoming an embarrassment for Ms Badenoch.

No wonder she does not want to talk about the main subject of the day in PMQs.

Our business and money editor Karl Matchett reports:

Time for a midday look at the markets and see who is avoiding the drops, perhaps, with the FTSE 100 now down 0.8 per cent for the day, similar to the Euronext (0.76%) and lower than the CAC 40 (0.64%).

It’s still Germany’s DAX which leads the losers though, now 1.3 per cent in the red ahead of Trump’s tariff talk.

On these shores though, it’s housebuilders, defence spenders and those who sell lots of individual items Stateside which are seeing a risk-off plan by investors affect them most.

GSK is down more than three percent and AstraZeneca two per cent in an example of the latter, with pharma of course big business everywhere, but domestically housebuilder Persimmon is the biggest faller of the day now, 3.4 per cent down. Rivals Barratt Redrow (-2.1 per cent) and Berkeley Group Holdings (-2.4 per cent) haven’t escaped either.

The DUP’s Gavin Robinson presses Sir Keir Starmer on the impact of tariffs from the US on Northern Ireland.

Even if the UK manages to get a carve out with a trade deal, Northern Ireland will not escape EU tariffs because of the Windsor framework and post Brexit settlement.

The prime minister says this is “why we need a calm and pragmatic approach” to what happens later on tonight.

But it is another sign that Brexit has taken control of what happens in the UK out of the hands of the government.

Our political correspondent Archie Mitchell reports:

Sir Ed Davey has once again challenged Sir Keir Starmer’s approach to Donald Trump, urging the prime minister to form an “economic coalition of the willing” to fight the US president’s tariffs.

The Liberal Democrat leader has repeatedly urged the prime minister to take a firmer stance against the White House under Mr Trump.

Sir Keir said Sir Ed has tried every week “to tempt me to make a false choice between our relationship with the US and with other countries, particularly Europe”.

“We have a good deal of trade relationship with the US, and our interests are best served by calmly trying to secure a deal which is in our national interest,” the PM said.

He refused Sir Ed’s calls to launch a trade war with the US in retaliation against Mr Trump’s tariffs, sticking to his plan to try to negotiate a carve out for Britain from the levies.

Sir Keir Starmer has opened this week’s PMQs session by discussing Donald Trump’s looming tariffs.

The prime minister told the Commons: “We’ve been preparing for all eventualities ahead of the confirmation of US tariffs later today.

“Let me be clear with the House, a trade war is in nobody’s interest. The country deserves – and we will take – a calm, pragmatic approach.

“That’s why constructive talks are progressing to agree a wider economic prosperity deal with the US. That’s why we’re working with all industries and sectors likely to be impacted.

“Our decisions will always be guided by our national interest, and that’s why we have prepared for all eventualities – and we will rule nothing out.”

Goldman Sachs has downgraded its forecasts for UK economic growth as a result of Donald Trump’s anticipated US tariffs.

The UK is now expected to see growth of 0.8 per cent this year, down from 0.9 – and 1.2 per cent in 2026, down from 1.3, according to the bank.

The below chart illustrates the UK’s quarterly economic growth in recent years: