The era of globalisation as we know it ‘has come to an end’, UK minister says
Here is some more reaction to the tariffs from London, where ministers are weighing up a response to Trump’s higher levies.
Darren Jones, chief secretary to the Treasury, has been speaking to Laura Kuenssberg on her BBC Sunday politics programme. Here is a roundup of what he said:
-
People should be prepared for things to be tougher in the global economy.
-
Globalisation has “come to an end” in the wake of the new tariffs. Asked if the era of “cheap fast-fashion or cheap TVs” was over, Jones said: “Yeah, it’s ended. Globalisation, as we’ve known it for the last number of decades, has come to an end.”
-
It is in the best interest of the British economy and workers to “get trade deals across the line”.
-
Jones said the government thinks a deal with Trump on tariffs can be reached, with talks ongoing. “We’re hoping to do a deal,” Jones said, adding that “we have a better outcome than other comparable countries as a consequence of our diplomacy”.
Key events
How have different countries reacted to Trump’s tariff announcement?
-
Indonesia, Southeast Asia’s largest economy which faces a 32% tariff rate, said it will not retaliate against the levies and would instead pursue diplomacy and negotiations to find mutually beneficial solutions. Jakarta has said it would send a high-level delegation to the US for direct negotiations with the government.
-
Cambodia asked the US government on Friday to postpone the 49% tariff rate on its products, the highest rate in Asia and second-highest globally.
-
Vietnam’s leader To Lam and Donald Trump agreed on Friday to discuss a deal to remove tariffs (Vietnam will be subject to a 46% tariff).
-
Brazil, which faces a 10% levy on its exports to the US, has said its “government is evaluating all possible actions to ensure reciprocity in bilateral trade, including resorting to the World Trade Organization, in defense of legitimate national interests”.
-
Taiwan’s top financial regulator said this morning it will impose temporary curbs on short-selling of shares to help deal with potential market turmoil brought resulting from the new import tariffs. Taiwan’s government said on Thursday that the new 32% tariff rate levied on the island were unreasonable and it would discuss them with Washington.
-
China has hit back hard against Trump’s imposition of 34% tariffs on Chinese goods, which were already subject to a 20% levy, taking the total levy to 54%. Beijing in turn announced a slew of countermeasures, including extra levies of 34% on all US goods and export curbs on some rare earth minerals.
-
Canada announced a limited set of counter measures against the latest US tariffs. The new Canadian prime minister Mark Carney said the government will copy the US approach by imposing a 25% tariff on all vehicles imported from the US that are not compliant with the US-Mexico-Canada trade deal (Canada and Mexico were exempt from Trump’s latest duties because they are still subject to a 25% tariff related to the US fentanyl crisis for goods that do not comply with the US-Mexico-Canada rules of origin). Carney says Canada will retaliate against “unjustified, unwarranted” tariffs.
Netanyahu heads to Washington to talk tariffs with Trump
The Israeli prime minister, Benjamin Netanyahu, is set to travel to Washington to meet with his close ally, US president Donald Trump.
Netanyahu will meet Trump on Monday to “discuss tariffs, efforts to bring back Israeli hostages (from Gaza), Israel-Turkey relations, the Iranian threat, and the fight against the International Criminal Court”, which has accused the Israeli leader of war crimes, his Jerusalem office said in a statement.
Israel was not spared from Trump’s tariff offensive. Unspecified Israeli goods exports to the US now face a 17% tariff. The US is Israel’s closest ally and largest single trading partner.
An Israeli finance ministry official said on Thursday that Trump’s latest tariff announcement could impact Israel’s exports of machinery and medical equipment. Israel and the US signed a free trade agreement 40 years ago and about 98% of goods from the US are now tax-free.
Netanyahu, the country’s longest-serving prime minister, travelled to the US in February. He will be the first leader to meet with Trump after the US imposed global tariffs. Israeli officials will be working hard to persuade the US president to lower or remove the tariffs.
Lisa O’Carroll
The White House’s tariff wars also risk reopening simmering Brexit tensions in Northern Ireland, as my colleague Lisa O’Carroll explains:
Donald Trump’s tariff plan could undermine the Brexit deal between the EU and the UK for trading arrangements in Northern Ireland, a highly sensitive agreement designed to maintain the 1998 peace pact.
As part of the president’s attempt to spur on a “rebirth” of the US, Trump has imposed a two-tier tariff rate on the island of Ireland – with a 20% tax on exports from the republic but a 10% rate on the UK, including Northern Ireland.
A former EU commissioner has questioned whether Trump thought through his plan’s effect on the peace process brokered by the US almost 30 years ago.
Although it could put Northern Ireland at an advantage over the Republic of Ireland for exports such as whisky and dairy produce, a political problem could arise if the EU retaliates with like-for-like tariffs of 20% on US imports.
Under the Windsor framework, the EU tariffs will apply in Northern Ireland, creating a manufacturing price difference between Northern Ireland and Great Britain for any important components from the US.
You can read the full story here:
British ministers have been suggesting for weeks that the UK could be spared from Trump’s tariffs with a bespoke trade deal with the US. But Trump did not exempt the UK from 25 per cent tariffs on steel, aluminium and cars.
Ministers are reportedly still working to persuade the Trump administration to scrap the 10 per cent tariff baseline global levy that has ensnared the UK along with many other countries around the world.
If UK negotiators can not agree a deal to reduce the 10% tariff by 1 May, the government may impose retaliatory tariffs on US imports, but Downing Street sees this as a last resort.
UK has been ‘treated differently to the EU’ as a result of Brexit – minister
Darren Jones, chief secretary to the Treasury, was also interviewed by Sky News’ Trevor Phillips this morning. He said the UK had been “treated differently to the European Union” as a result of Brexit. As a reminder, Trump has imposed a 10% tariff on UK goods but a 20% tariff on EU goods.
Asked if the lower 10% tariff imposed by the US was a “Brexit dividend”, the chief secretary to the Treasury said:
It is, there’s one. I’ve struggled to find one in the past but there is one we’ve ended up with.
It’s good, but what we’re not going to do is pick or trade off the United States or the European Union.
I’ve already talked about relationship with the United States, we know that’s important and works well, but so is our relationship with the European Union – on trade, on energy, but increasingly on security, and I think it’s the right strategic decision for the UK, especially in this world that’s chopping and changing around, that we have those strong bridges into the European Union and into the United States, and that’s what we’re working to deliver.
Jones’ comments echoed those from the shadow trade secretary, Andrew Griffith, who suggested that Brexit had spared the UK from higher import taxes.
Griffith said: “The silver lining is that Brexit, which Labour ministers voted against no less than 48 times, means that we face far lower tariffs than the EU: a Brexit dividend that will have protected thousands of British jobs and businesses.”
The era of globalisation as we know it ‘has come to an end’, UK minister says
Here is some more reaction to the tariffs from London, where ministers are weighing up a response to Trump’s higher levies.
Darren Jones, chief secretary to the Treasury, has been speaking to Laura Kuenssberg on her BBC Sunday politics programme. Here is a roundup of what he said:
-
People should be prepared for things to be tougher in the global economy.
-
Globalisation has “come to an end” in the wake of the new tariffs. Asked if the era of “cheap fast-fashion or cheap TVs” was over, Jones said: “Yeah, it’s ended. Globalisation, as we’ve known it for the last number of decades, has come to an end.”
-
It is in the best interest of the British economy and workers to “get trade deals across the line”.
-
Jones said the government thinks a deal with Trump on tariffs can be reached, with talks ongoing. “We’re hoping to do a deal,” Jones said, adding that “we have a better outcome than other comparable countries as a consequence of our diplomacy”.
The EU is likely to approve its first set of targeted countermeasures on up to $28bn (£21.7bn; €25bn) of US imports in the coming days, Reuters is reporting.
The 27-nation bloc faces 25% import tariffs on steel and aluminium and cars and “reciprocal” tariffs of 20% from Wednesday for almost all other goods.
The European Commission, which coordinates EU trade policy, will propose to members late on Monday a list of American products to hit with extra duties in response to Trump’s steel and aluminium tariffs rather than the broader reciprocal levies.
It is set to include US meat, cereals, wine, wood and clothing as well as chewing gum, dental floss, vacuum cleaners and toilet paper. The EU has been cautious to respond the tariffs so far.
European Commission President Ursula von der Leyen said Trump’s levies were a “major blow to the world economy” but held off announcing new countermeasures, adding that the commission was “always ready” to talk.
Trump’s tariffs cover some 70% of the EU’s exports to the US – worth in total €532bn ($585bn; £454bn) last year – with likely duties on copper, pharmaceuticals, semiconductors and timber still to come.
On Monday, Luxembourg will host the first EU-wide political meeting since Trump’s announcement of the sweeping tariffs when ministers responsible for trade from the 27 EU members will exchange views on the impact and how best to respond.
Trump’s tariffs explained
My colleagues have done a useful explainer breaking down what Trump’s tariffs are and how they’ve affected the economy since the announcement. Here is an extract from it:
What exactly are the new tariffs Trump is imposing?
Trump’s new tariffs are twofold. First, all imported goods will be subject to a 10% universal tariff starting 5 April. Then, on 9 April, certain countries will see higher tariff rates – what Trump has deemed “reciprocal tariffs” in retaliation for tariffs the countries have placed on American exports.
Keep in mind that tariffs are paid by American companies that are importing goods such as wine from Europe or microchips from Taiwan.
Some of the highest tariffs will be put on imports from Asian countries, including China, India, South Korea and Japan. EU exports will also have a 20% tariff.
How did the White House calculate the tariffs?
The administration said that it looked at the trade deficit between the US and a specific country as a percentage, and then considered that to be a tariff. So, for example, the value of US goods that are exported to China are 67% of the value of the Chinese goods that are imported into the US.
The White House calls this definition a “tariff” placed on American goods, though a deficit and a tariff are not the same thing. It then halved the “tariff” and used that percentage to represent the new levy that the US would place on goods from that country.
Here is a video of Trump announcing the sweeping tariffs on Wednesday. They were regularly touted on the Republican’s presidential campaign trail but their scale have taken many commentators by surprise:
How have car manufacturers reacted to Trump’s tariffs?
The US’s 25% tariff on imported cars and light trucks took effect on Thursday, the day after Trump announced tariffs on other goods from countries across the globe. This has prompted a swift reaction from car manufacturers.
Britain’s car industry, which employs 200,000 people directly, is highly exposed to the new tariffs. The US is the second-biggest importer of British-made cars after the EU, with nearly a 20% share.
Jaguar Land Rover has announced it would “pause” shipments to the US, as the The Coventry, England-headquartered company says it is working to “address the new trading terms” and is looking to develop its “mid- to longer-term plans”.
The Institute for Public Policy Research (IPPR) thinktank has said over 25,000 direct jobs in the car manufacturing industry could be at risk as exports to the US are projected to fall.
Meanwhile, carmaker Stellantis said on Thursday it was temporarily laying off 900 workers at five US facilities after Trump’s tariffs were announced, and temporarily pausing production at an assembly plant in Mexico and one in Canada.
Stellantis, which owns car brands like Jeep, Citroën and Ram, said it will be temporarily pausing production at the Windsor assembly plant in Canada up until the week of 21 April.
The company will also be temporarily pausing production at the Toluca assembly plant in Mexico for the month of April, starting tomorrow. Due to the production pause, there will be temporary layoffs at the Warren and Sterling stamping plants in Michigan and at the Indiana and Kokomo transmission plants and Kokomo casting facility in Indiana.
However, the United Automobile Workers union, one of biggest trade unions in the US, endorsed the tariffs, which Trump sees as a way of tempting US manufacturers to return to America.
The union said the decision “signals a return to policies that prioritize the workers who build this country — rather than the greed of ruthless corporations.” Shawn Fain, the union president, said “ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions”.
UK’s PM warns ‘the world as we knew it has gone’ as countries mull response to Trump’s tariffs
Welcome back to our live coverage of the economic fallout from Donald Trump’s announcement of sweeping tariffs last week.
Almost $5tn (£4tn) was wiped off the value of global stock markets after the US president made his shock announcement last Wednesday, which included a 10% base tariff on imports into the US from the UK.
Trump’s 10% tariff on UK products came into force on Saturday, as global stock markets continued to fall in response to the imposition of import taxes.
Cambodia, Vietnam and Thailand were struck with tariffs of 49%, 46% and 36%, while the EU faces a levy of 20% for all the goods it exports to the US.
The FTSE 100 plummeted on Friday in its worst day of trading since the start of the pandemic, while markets on Wall Street also tumbled.
Analysts warn that already sluggish UK economic growth could be up to 0.5 percentage points lower over coming years as a result of Trump’s tariffs.
In reaction to the US tariff offensive, the UK’s prime minister, Keir Starmer, has written an opinion piece in the Sunday Telegraph, saying he is ready to “use industrial policy to help shelter British business from the storm”. He is among world leaders who are in intense discussions with their teams, carefully weighing up how to respond to the president’s tariffs.
“Old assumptions can no longer be taken for granted. The world as we knew it has gone. We must rise to meet the moment,” Starmer wrote.
“We are ready for what comes next. The new world is less governed by established rules and more by deals and alliances.”
Stay with us as we will keep bringing you all the latest updates and reaction to the tariff’s throughout the day.
