Key events
The EU is likely to approve its first set of targeted countermeasures on up to $28 billion 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) 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.
