Donald Trump’s worldwide baseline tariff of 10% has kicked in this morning. Global stocks were left reeling after they suffered a pounding for the second day in a row on Friday. In the UK, the FTSE suffered its worst day of trading in five years. Listen to Trump 100 analysis as you scroll.
Saturday 5 April 2025 13:34, UK
Live reporting by Kieren Williams
A bit more catch on our podcasts from this week’s chaotic fallout from Donald Trump’s tariff onslaught.
Listen along below for political reaction on Electoral Dysfunction, asking how the PM could stay calm in the face of Trump’s tariffs, and one “heartbreaking” consequence of a possible US-UK trade deal.
👉 Click here to listen to Electoral Dysfunction on your podcast app 👈
More to bring you from some of the guests speaking to Kamali Melbourne now.
John Alty, former permanent secretary at the Department of International Trade, sat down with Sky News to discuss the fallout and explain why the much-sought-after US trade deal may not be the panacea some hope for.
“I’m sure the government is still trying to get a trade deal with the US, but the problem for the UK and other countries, even if we get a deal ourselves with the US, if there are tariffs around the world then international trade is going to be disrupted and the UK will still feel the imapct of that, so it’s not just about a bilateral deal with the US,” he explained.
Alty added that one key problem for many was deciphering whether the tariffs were “negotiating leverage or if they’re really going to stick”.
He added: “If they’re going to stick, that makes it very difficult.
“But difficult for the US too because you will get countries retaliating.”
How much pain can Trump stomach?
Trump has previously said he’s willing to stomach some political and economic pain from the tariffs.
But we’ve been hearing increasing murmurs over the past few days from Republicans who are starting to raise questions.
“We need to see this play out over several weeks and months before we can really judge whether the pain levels are too high for the US as well,” he said.
He added: “It is very difficult to work out what is serious and what is leverage.
“Things have changed very quickly, but that is the challenge, always the challenge to negotiators… this is just maybe on steroids.”
A chief policy maker for the European Central Bank (ECB) has warned that uncertainty triggered by Donald Trump’s tariff barrage may only get worse.
While many will be hoping for some good news in light of the economic turmoil triggered in the Rose Garden this week, Isabel Schnabel cautioned against anyone getting their hopes up too much.
Speaking at an economic forum in northern Italy, Schnabel said the ECB was looking closely at how the Eurozone’s growth may be hit.
For now, she said recent events had caused “a dramatic surge in uncertainty,” which may be only the beginning.
“Some people had the view that liberation day could be the day of peak uncertainty, but I’m not entirely sure that is the case,” she warned.
Schnabel, who sits on the ECB’s Frankfurt-based board, also rejected Trump’s claims, one of many, that the EU was formed to “screw” the US.
“Of course the EU was not born to screw the United States, but it was born to make Europe thrive,” she said.
Donald Trump’s tariffs “seem to be to our advantage”, the vice president of Turkey has said.
Most world leaders have lamented the tax Trump slapped on trade partners, as well as further reciprocal ones in the pipeline.
But in Turkey, there seems to be a small degree of optimism.
Trump’s baseline tariff plays to Turkey’s advantage, vice president Cevdet Yilmaz told broadcaster CNN Turk.
“There were already tariffs on iron, steel and aluminium [exports from Turkey to the US]. When [the US] imposed similar tariffs on the others, there was an equalisation there, it was in our favour,” he added.
Yilmaz said that as an importer, Turkey would benefit from a drop in international commodity prices, including oil.
Turkey’s trade minister Omer Bolat said on Friday that the Turkish government wanted to negotiate with the US to lift the 10% tariffs.
He called them the “best of the worst”, given higher tariffs on many other countries.
Countries across the globe are planning their response, or lack thereof, to Donald Trump’s tariffs.
But one nation has already responded.
China responded to Trump’s 34% tariff with its own levy of the same percentage on US imports.
‘US using tariffs as a weapon’
According to state news agency Xinhua, China has this afternoon accused the US of using tariffs “as a weapon” to suppress Beijing’s economy.
The country’s foreign ministry added that the US should “stop undermining the legitimate development rights of the Chinese people”.
It also warned there were no winners from and no way out for protectionism.
China also claimed that the US tariffs violated World Trade Organization rules – rules it itself has broken a number of times.
‘China will never yield’
Professor Wang Wen, trade expert at the Chongyang Institute for Financial Studies, spoke from Beijing to Kamali Melbourne.
He outlined why he believed the tariffs would eventually benefit China, and why Beijing would “never yield” to the US president.
“The basic strategy of China’s tariff policy against Trump is to count on reciprocal rules and defend China’s national interest and dignity. China will never yield to Trump on the issue of tariff war,” he said.
Professor Wen added: “In the future, many Chinese factories and companies will seek more international production bases… now Trump is forcing more Chinese companies to go abroad.
“From this perspective… in the long term, Trump is helping Chinese companies better achieve global operations.
“Time is on China’s side.”
For context:
China and America’s tariff war is nothing new and stretches back to Trump’s first term – and continued in Joe Biden’s as well.
The war of words is similarly dated.
The two have long been sizing one another up as the dominant geopolitical forces globally.
So any perceived upset for Trump, especially from his own policy, will be welcomed in China.
To get another flavour of Beijing’s defiant and punchy response, the below is a Facebook post from a foreign ministry spokesperson…
Now to bring you some news on the tariff fallout for a well-known British car company.
Jaguar Land Rover is reportedly pausing shipments of British-made cars to the US, according to The Times.
The move, from one of Britain’s biggest carmakers, would be one of the starkest examples of how Donald Trump’s tariffs are affecting global trade.
It was reported the decision would kick in from Monday as the company works out how to mitigate the 25% import tax the US president imposed.
The Times added the move would last a month as the India-owned company assesses the damage and works out next steps.
JLR employs 38,000 Britons and reportedly sells around a quarter of its cars to the US.
We can bring you some analysis now from our political correspondent Amanda Akass.
She’s just been speaking to Kamali Melbourne, where she outlined the UK response to the tariffs which came just days after the government’s spring statement.
“Donald Trump described Starmer as being ‘very happy’ over the 10% tariff slapped on the UK, and I think it’s fair to say that’s not really true,” she said.
She pointed out how his spokesperson had described Starmer as “disappointed”.
“But, as with all of his dealings with the White House, the prime minister’s approach has been to stick to a very balanced approach,” she said, describing it as “softly, softly”.
Meanwhile, she pointed out, Starmer will be talking to other world leaders today one-on-one, while consulting businesses over the prospect of counter measures.
Akass said: “Clearly that’s the government’s focus, they are hoping that they will be able to negotiate some kind of carve out as a result of this trade agreement which seems to be focusing on technology.
“But it hasn’t been signed yet.”
‘Difficult decisions in the autumn’
Akass said she thought the government would make a move this week to focus on what they could do to shape their own economic policy.
This, she said, included “bringing forth announcements on industrial strategies because the impact of all of this on the markets has downgraded the UK’s growth prospects, which will cause major problems for the chancellor’s attempts to balance the books and stick to her fiscal rules.
“She only gave her spring statement a week or so ago, now with this careful calibration of the fiscal headroom, if all of that has been blown up by Donald Trump, the government is going to have some difficult decisions to make come the budget in the autumn.”
One UK car trade association has told Sky News of the possible impacts US consumers may feel from their own president’s tariffs.
The Society of Motor Manufacturers and Traders is one of the largest auto trade associations in the UK.
Its chief executive Mike Hawes told Sky News the 10% baseline tariff was “another deeply disappointing and potentially damaging measure”.
“Our cars were already set to attract a punitive 25% tariff overnight and other automotive products are now set to be impacted immediately,” he added.
Hawes warned that: “These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.
“Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic.”
A lot of the news this week has been serious, with worries over global economics, trade, recessions and job losses.
So we’ll now bring you something a bit lighter from the fallout of this week’s tariff barrage.
While at first glance, most people paid attention to the tariffs imposed on the likes of China, one small island later drew questions.
The Heard and McDonald Islands are an external territory of Australia in the Antarctic that is inhabited only by penguins and seals.
Despite having no human residents – or imports and exports – the island now faces a 10% tariff for any goods bound for the US.
According to export data from the World Bank, the US imported $1.4m (£1m) of mainly “machinery and electrical” products from Heard Island and McDonald Islands in 2022.
Australian territory Norfolk Island, a volcanic island 600 miles east of Queensland, was also hit with a hefty 29% tariff on exports to the US.
That’s much higher than mainland Australia, which had a 10% tariff imposed.
The news was met with confusion by some of Norfolk Island’s 2,188 residents.
“Norfolk Island is a little dot in the world,” Richard Cottle, owner of a concrete-mixing business on the island, said on Thursday.
“We don’t export anything. It was just a mistake”.
Read more on some of the bits from Trump’s tariffs that you may have missed below…
Most world leaders have likely spent this week pulling out their hair and tearing up their economic plans.
But while others prepare responses, see our 9.51am post, or discuss the next step with others, 7.52am post, Argentina’s right-wing president was feted at Mar-a-Lago.
Javier Milei flew to Palm Beach for 24 hours to receive an award honouring his libertarian agenda and, he hoped, to chat with Donald Trump.
At the right-wing ‘American Patriot’ gala, Milei shouted: “Make Argentina Great Again!” from the ballroom stage.
While the meeting didn’t go ahead, the pair have already talked face-to-face on at least three occasions.
But despite presenting himself as one of Trump’s staunchest allies in the war against the “woke left”, analysts say it isn’t clear if Milei has benefited from it.
“He has a special relationship with Trump that has been good for him politically, but he needs to translate that into being good for the country economically,” said Marcelo J Garcia, director for the Americas at New York-based geopolitical risk consultancy Horizon Engage.
“He hasn’t managed to do that yet.”
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