Trump hits UK with 10% tariff and sets blanket 25% rate for foreign cars

Donald Trump slapped a 10% tariff on US imports of UK goods as he set out sweeping trade levies hitting countries across the world.

The US president said his “liberation day” announcement was a “declaration of economic independence”.

Mr Trump confirmed that from midnight in Washington, 5am Thursday in the UK, a 25% tariff would be imposed on all foreign cars imported to the US – a move which experts fear could cost 25,000 jobs in the British car industry.

And he indicated tariffs of 10% would apply to other products from the UK – the same level as the global “baseline” he was setting for countries around the world as part of his “reciprocal” measures.

Other blocs with higher tariffs on US goods were hit with tougher import taxes by Mr Trump – for the European Union, which he said would attract a 20% rate.

The president also hit out at “exorbitant” VAT rates, which he views as a barrier to US firms seeking to sell into markets such as the UK where the taxes apply.

Speaking in the White House rose garden, Mr Trump said: “April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again.”

Sir Keir Starmer’s Government had been lobbying to be spared the tariffs and hopes to strike an economic deal with the White House which will mitigate the impacts.

But Chancellor Rachel Reeves acknowledged the UK would not be “out of the woods” even if a deal could be reached with Mr Trump because of the global economic storm the president’s measures will unleash.

The US dollar fell sharply against key currencies on Wednesday evening as Mr Trump delivered his tariffs announcement.

The dollar had dropped about 0.7% against the pound, at 0.768, shortly after the speech began.

The US currency was weakening further against the euro, falling about 1%, at 0.9162.

Mr Trump said: “This is one of the most important days in my opinion in American history.

“It’s our declaration of economic independence.”

Setting out his measures he said the US had “slashed our trade barriers on other countries while those nations placed massive tariffs on our products and created outrageous non-monetary barriers to decimate our industries.

“And in many cases, the non-monetary barriers were worse than the monetary ones.

“They manipulated their currency, subsidised their exports, stole our intellectual property, imposed exorbitant VAT taxes to disadvantage our products, adopted unfair rules and technical standards and created filthy pollution havens.”

Analysis from the Institute for Public Policy Research (IPPR) suggested tariffs on car imports would put 25,000 UK jobs at risk and “completely destabilise the UK car manufacturing industry”.

The 25% rate on cars had already been expected, but the 10% reciprocal tariff was lower than had been feared with suggestions Mr Trump could have set it at 20%, the same level as VAT.

Published: 02/04/2025 by Radio NewsHub