Reeves Sounds Alarm Over Trump’s Tariff Bombshell

Britain is bracing for economic fallout as US President Donald Trump prepares to announce sweeping new tariffs — with Prime Minister Sir Keir Starmer admitting the UK is unlikely to be spared despite efforts to secure a transatlantic trade deal.

In a stark warning to the Cabinet, Chancellor Rachel Reeves revealed the planned import taxes could deal a significant blow to the UK economy, raising fears of job losses across key industries such as automotive and manufacturing.

“President Donald Trump’s tariffs war could have far-reaching consequences for Britons, even if the UK manages to escape direct levies,” said Myron Jobson, senior personal finance analyst at Interactive Investor. “If tariffs contribute to higher inflation, central banks may be forced to tighten monetary policy… This could impact everything from mortgage rates to corporate investment, potentially slowing economic growth.”

Trump’s announcement, dubbed “Liberation Day” by the US President himself, is expected on Wednesday. His administration has already confirmed a 25% tariff on imported cars — a move that hits at the heart of the UK automotive industry, which sent over 100,000 cars to the US last year, worth more than £7.6 billion.

Steel and aluminium tariffs are already in place, and now concerns are growing that the US could impose further levies in retaliation over the UK’s VAT regime, which Washington believes unfairly targets American goods. A 20% tariff on British imports is on the table, according to US sources.

Despite the mounting pressure, Sir Keir is urging a measured approach.

“Businesses want a calm and collected response to this, not a knee-jerk,” he said, adding that while “nobody wants to see a trade war,” the UK must be prepared to act. “All options remain on the table,” he warned.

Asked whether he had been “played” by Trump after weeks of behind-the-scenes diplomacy to secure better trade ties, the Prime Minister stood firm.

“The US is our closest ally. Our defence, our security, our intelligence are bound up in a way that no two other countries are,” he said. “It’s obviously in our national interest to have a close working relationship with the US, which we’ve had for decades, and I want to ensure we have for decades to come.”

Starmer noted that discussions for a UK-US economic agreement had advanced more rapidly than expected. “Talks on a UK-US economic deal would normally take months or years,” he said. “But in a matter of weeks, we have got well advanced in those discussions.”

Meanwhile, the economic warning signs are flashing. Matt Swannell, chief economic advisor to the EY Item Club, told the BBC that expectations of higher tariffs are already impacting demand for exported goods, forcing firms to make tough decisions: “The sector [is] cutting jobs,” he said.

Conservative leader Kemi Badenoch echoed the need for diplomacy over confrontation, stating that a comprehensive trade deal is “the best way” to avoid economic pain. “Some people will want us to have trade retaliation, that just makes everyone poorer,” she told LBC.

With Trump’s announcement imminent, the UK faces a pivotal moment. Whether diplomacy can prevent a trade war — or if British businesses must brace for economic headwinds — remains to be seen. But one thing is clear: “Liberation Day” in Washington could mean anything but freedom for British exporters.

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