Keir Starmer is breathing a sigh of relief today after Donald Trump’s new ‘global’ tariff took effect at 10 per cent instead of the 15 per cent he threatened.
Businesses had raised alarm over the US president’s escalation after the Supreme Court struck down his flagship policy.
Mr Trump responded to the setback by announcing he would introduce a new blanket 10 per cent levy instead of the ‘reciprocal’ rates for individual countries – which were found to be outside his powers.
But he then announced on his Truth Social site that the level would be pushed up to 15 per cent.
That would have been higher than the previous charges faced by Britain, with Downing Street refusing to rule out retaliation. The EU also paused the process of ratifying a major trade deal with the US, accusing Mr Trump of flouting the terms.
Ministers have also now been reassured that the deal the PM negotiated on steel and cars still stands.
One senior government source told the Daily Mail the UK is now ‘essentially back where we were last week’.
Keir Starmer is breathing a sigh of relief today after Donald Trump’s new ‘global’ tariff took effect at 10 per cent instead of the 15 per cent he threatened
When the new tariff took effect at 5am UK time, it was at 10 per cent and will last for 150 days, until July 24. After that US law appears to require Congressional approval, although Mr Trump has suggested that is not the case.
It will apply on top of America’s most favoured nation duties.
The British Chambers of Commerce (BCC) said that while firms will be relieved, there are fears the higher 15 per cent rate could still be imposed at any time.
William Bain, head of trade policy at the BCC, said: ‘It shows how difficult it is for businesses to plan ahead.
‘It is far from clear what will happen next and whether a higher tariff rate is still on the way.
‘Despite the immediate reprieve, there is fresh uncertainty for UK firms exporting goods to the US.
‘This makes it very difficult for firms to understand the prices and margins they will be able to secure for their goods, currently under production, for export in several months’ time. Inevitably this will have an impact on their sales and hit the economy.’
Mr Bain added: ‘The risk of further tariff pain to come is still real and the Government must do everything it can to prepare for the worst.’
Downing Street said yesterday that ‘nothing is off the table’ in the UK’s response to the tariff threats, leaving open the possibility that Britain could impose reciprocal trade levies on American goods and services.
But No10 but insisted it was focused on ‘constructive engagement’ with the Trump administration as a trade war would harm businesses.
Stock markets worldwide saw heightened volatility yesterday and the US dollar weakened , sending investors flocking once more to safe haven assets such as gold.
The FTSE 100 held relatively steady, after a bullish run in recent weeks.
Derren Nathan, head of equity research at Hargreaves Lansdown, said investors were ‘on edge as AI fear and tariff uncertainty hang thick in the air’.
