Trump’s ‘liberation day’ tariffs will unleash a ‘world of pain’ on ordinary people, experts warn

Donald Trump has imposed a 10% tariff on UK exports to the United States, part of a suite of taxes that could spark a global trade war and upend the world economy. 

The US president hit countries around the world with ‘liberation day’ tariffs ranging from 10% – the “minimum baseline” rate – to 54%. 

Trump accused allies and economic rivals of “looting, pillaging, raping and plundering” America, because America imports more foreign good than it exports. “In many cases, the friend is worse than the foe,” he added.

The president claims that the taxes – include charges of 20% on the European Union and 53% on China – would redress trading imbalances and boost domestic manufacturing. 

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But global leaders have warned that they could kickstart a global trade war, wiping billions off economic growth and sending stocks into freefall. Additionally, they may put the US into recession – high import taxes mean higher prices for consumers, as businesses look to offset their losses. 

Responding to the tariff, prime minister Keir Starmer said that his team would act with “cool and calm heads” over the “coming days and weeks”. He did not rule out reciprocal charges.

“I want to be crystal clear – we are prepared.. We have a range of levers at our disposal, and we will continue our work with businesses across the country to understand their assessment of these options.

“As I say – our intention remains to secure a deal. But nothing is off the table.”

European Commission chief Ursula von der Leyen confirmed that the EU would impose counter-charges, and issued a bleak warning: “The global economy will massively suffer, uncertainty will spiral and trigger the rise of further protectionism.”

Normal people – who will experience job losses and high prices as a result of these taxes – will bear the brunt of Trump’s policies, said Nick Dearden, director of Global Justice Now.

“Trump has set light to the global economy and unleashed a world of pain, not least on a group of developing countries that will suffer tremendous impoverishment as a result of his punitive tariffs,” he warned.

“All those affected must come together and stand up to this bully by building a very different international economy that promotes the interests of ordinary people rather than the oligarchs standing behind Trump. For all its scraping and crawling, the UK got no special treatment here, and the government should learn this lesson fast: they need to stop giving away our rights and protections in a futile effort to appease Donald Trump.”

What will Trump’s tariffs mean for the UK?

The UK has got off with a relatively low rate, half that imposed on the EU. Several poor countries were hit very hard. War-torn Myanmar – which is currently in the middle of responding to a devastating earthquake – was hit with 44% charge, for example.

The government claims it’s proof that Starmer’s conciliatory approach to Trump is paying off. But with UK businesses exporting over £60bn in goods to the US annually, even this lower rate will have serious knock-on impacts.

Additionally, 10% is not the full picture – the UK has also been subjected to a 25% import tax on steel and aluminum, and a 25% tax on car imports. One in eight UK-built cars are exported to the states; the country is UK producers’ largest single export market. Yesterday, IPPR estimated that the tariff could put 25,000 jobs at risk.

The Conservatives deny that the UK has received any kind of favourable deal. 

“Dozens and dozens of countries have the same 10% tariffs on all goods and 25% on cars, just the same as us – from Costa Rica to Colombia, from Peru to Paraguay. So we’re not getting any special deal or special treatment,” Chris Philp, the shadow home secretary, told LBC today (3 April).

“These tariffs are based on essentially reciprocation of what America thinks they’re being charged by other countries. This is really bad for our economy. It’s going to put jobs and growth at risk.”

A reciprocal trade war would wipe billions off economic growth, the Office for Budget Responsibility (OBR) has warned, eliminating Rachel Reeves’ ‘fiscal headroom’ – the buffer the government has to carry out its spending plans. Without it, the chancellor would need to raise taxes or undertake yet more cuts.

If the UK and other nations retaliate against US tariffs, GDP could shrink by 0.6% this year and 1% next year, the OBR estimates. If the UK refrains from countermeasures, the economic decline would be less pronounced, with GDP falling 0.4% this year and 0.6% next year.

Regardless of the UK’s specific exemptions, Reeves is in a difficult position, IPPR’s Pranesh Narayana told Big Issue. 

“The impact of tariffs isn’t just the sort of direct impact of one country’s goods getting more or less expensive. It’s also the impact on global supply chains,” he said. “The UK might get hit by lower tariffs and the EU, but then the EU might retaliate against the US, and it creates a whole maze for businesses to navigate.”

Paul Nowak, Trades Union Congress general secretary, said that the UK should look to shore up its relationship with the EU. 

“Trump’s tariffs underscore the need for the UK to reset its economic relationship with the EU, our largest trading partner,” he said. “The government must act decisively to safeguard British jobs and industries.”

The government is reportedly considering watering down the digital services tax on Big Tech to try and usher in favourable trading conditions. 

But advocates have urged the government not to “wave through Big Tech’s wish list”.

“Trump is a bully, and he will continue to hang the threat of tariffs over our heads until we give him what he wants. First and foremost, he is demanding that we prioritise the interests of Big Tech corporations over our own rights and protections – giving tax breaks to Elon Musk, and allowing US corporations open access to our private NHS data,” said Global Justice Now’s Dearden.

“The long-term pain of giving away control over Big Tech is a huge price to pay for short term advantage in a global tariff war. As with all bullies, we need to stand up to them. Starmer has shown no backbone to date when it comes to Trump. We need to demand he change course.”

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