Donald Trump: US trade tariffs on UK announcement time today, what are they – American 'Liberation Day' news

• Donald Trump is set to announce major trade measures at a White House event dubbed ‘Liberation Day’

• Proposed 20% tariffs on British imports and a 25% tax on cars could hit key industries

• Analysts warn tariffs could shrink the UK economy by 1% and threaten 25,000 jobsImport taxes may raise inflation, increase borrowing costs, and squeeze household budgets

• The UK is exploring diplomatic solutions while the EU signals possible retaliation

US President Donald Trump is expected to announce sweeping tariffs today (April 2) at a White House event he has dubbed “Liberation Day”.

The move is aimed at boosting American manufacturing by making foreign products in the US more expensive and encouraging Stateside consumers to buy America-made goods.

But the tariffs, targeting countries around the world, could also have significant consequences for the UK economy and consumers.

So just how will “Liberation Day” affect the average British consumer, and what will it mean for the amount of money in your pocket? Here is everything you need to know about it.  

What are the proposed tariffs?

Trump’s announcement, set for around 9pm UK time this evening (April 2), is expected to introduce tariffs on a range of goods from multiple countries.

Tariffs are taxes that governments place on imported goods to make them more expensive. This is often done to encourage people to buy products made in their own country instead of from abroad.

But tariffs can also lead to higher prices for consumers and trade disputes between countries. 

While details of the full scope of what Trump might announce remain unclear, the tariffs could be as high as 20%, potentially covering everything from cars to electronics.

In terms of the UK, the Trump administration sees the application of the VAT rate as discriminatory against US products and may retaliate with a 20% tariff on imports from Britain.

Trump has already declared a 25% import tax on all cars coming into the US, a move that could significantly impact the UK’s automotive industry.

The President views this as a strategy to protect American jobs and industries, but the economic implications for the UK could be drastic, leading to higher costs for a wide variety of imported goods and shaking up the UK/US trade relationship.

What impact could tariffs have on the UK economy?

The impact on the UK economy could be severe. For Chancellor Rachel Reeves, the Office for Budget Responsibility has warned that these tariffs could eliminate the “headroom” against her debt target.

This could force the Government to make difficult choices, such as cutting public spending or raising taxes to stay within its fiscal rules.

The OBR is also predicting that – if UK exports decline as forecasted – the economy could shrink by up to 1% as a result of the tariffs.

Analysis from the Institute for Public Policy Research (IPPR) has suggested that Trump’s 25% import tax on all cars entering the US could put 25,000 UK jobs at risk and destabilise the car manufacturing industry, which relies heavily on exports to the US.

The UK’s steel and aluminium industries are also vulnerable, as they already face tariffs under previous Trump trade policies. If these measures are expanded, it could further damage key manufacturing sectors.

What could it mean for consumers?

But it’s not just the economy and industry that are likely to be affected by tariffs, and for the average UK consumer, the consequences of these tariffs are likely to be felt in daily life.

The National Institute of Economic and Social Research (NIESR) has estimated that tariffs could increase UK inflation by around 3.4 percentage points in 2025.

The Bank of England may be forced to raise interest rates to curb rising inflation, which would increase the cost of borrowing. This could make mortgages, personal loans, and credit card debts more expensive, further squeezing household budgets.

Higher import taxes on goods such as electronics, clothing, and food items will also likely result in price hikes across a range of products.

This will directly reduce purchasing power, leaving consumers with less money to spend on other goods at a time when the cost of living remains a pressing issue for many.

Trump’s trade policies could add another layer of financial strain, and many may find themselves tightening their belts, which could further slow economic activity – a slowdown in growth could weaken wage increases.

What’s being done about it?

The Government has said it is prepared for the worst, though it remains hopeful of securing a deal to protect at least some sectors from these tariffs.

Business and Trade Secretary Jonathan Reynolds has said that all options are on the table to respond to the US move, and the European Union has already signalled its readiness to retaliate against the US.

But the UK appears to be taking a more cautious approach, with many urging against retaliatory tariffs, and instead suggesting diplomacy and trade deals as the best path forward.

But though an island nation, the UK does not sit alone on the world economic stage, and depending on the response of our European neighbours, Britain could soon find itself caught in the crossfire of a much larger trade conflict.

Retaliatory measures could further strain the UK’s relationship with the US at a time when securing strong international trade agreements is crucial.

UK negotiators are reportedly focusing on a deal related to digital services, including possible adjustments to the controversial 2% digital services tax, which could offer some protection for the UK from the worst of the tariffs.

Whether the UK can secure exemptions or soften the blow remains to be seen (any deals are unlikely to be reached before the announcement), but Trump’s “Liberation Day” could have significant and lasting consequences.

What do you think about Trump’s new tariffs? Are you worried about the impact on jobs, prices, or the economy? Let us know your thoughts in the comments section.