The US president's tariffs are almost certain to backfire and he is not impervious to market decline or public opinion

Jonathan Reynolds tells MPs he is keeping all options on the table' after Trump's announcement of import taxes on British goods

A global trade war could affect everything from prices to pensions, and inflation to interest ratesDonald Trump's announcement that the US will put tariffs on goods from around the world, including a 10% charge on UK imports, has signalled the start of a global trade war.Although the UK faces a lower tariff than many other countries, for UK consumers there could still be some fallout. How it all plays out remains unclear. Continue reading...

Chinese commerce ministry says there is no way out for protectionism' as tariffs rise from 20% to 54%China has condemned the unilateral bullying" practices of the US, as it urged Washington to immediately drop the enormous tariffs that have been placed on Chinese goods.Late on Wednesday night, the White House unveiled sweeping new tariffs on all imports to the US. Chinese goods, which were already subject to a 20% levy, received an additional 34% tariff, taking the total tariff to 54%. The additional levy, part of Donald Trump's suite of so-called reciprocal tariffs" targeted at specific countries, takes effect on 9 April. Continue reading...

Jonathan Reynolds has urged MPs to keep calm as the government gauges its response to Donald Trump's announcement of tariffs on countries around the world, including the UK. Reynolds said the UK had launched consultations with businesses and would be open to a trade deal with the US on favourable terms

Willing sycophants' came up with simplistic formula that has thrown global economy into disarray

Donald Trump's threats to impose widescale import levies have spooked governments, investors and analysts alike. Here's why ...Donald Trump has said tariffs" is the most beautiful word in the dictionary.The US president is expected to announce his latest round of these border taxes on Wednesday at 4pm ET (9pm BST). In what he is calling liberation day", Trump has argued the step is needed to raise money and to encourage domestic manufacturing. But it is also rattling the global economy. Continue reading...

Challenged by Kemi Badenoch, PM says while no option has been ruled out, he will avoid kneejerk reactions'

What is expected from Donald Trump's tariffs on US imports and how will EU and UK leaders react?The EU and the UK are bracing for a damaging trade war with the US, as Donald Trump is expected to implement his threat to impose tariffs on imports from Europe.For weeks, he has named 2 April liberation day", with the unveiling of a tariff plan to reverse what he called unfair practices that have been ripping off our country for decades". Continue reading...

In today's newsletter: The administration's sweeping tariffs have left markets bracing for volatility - but what impact will they have on an unsteady global economy?Good morning. According to Donald Trump, it's liberation day": the advent of a new trade order in which Americans reap the benefit of massive tariffs on imports, and the rest of the world picks up the tab.Unsurprisingly, the United States' trading partners tend to take a very different view. And they are doing everything they can to avoid being passive targets for the White House's carnivorous vision of American exceptionalism.Israel-Gaza war | Israeli Defence Minister Israel Katz announced a major expansion of the military operation in Gaza on Wednesday, saying large areas of the enclave would be seized and added to the security zones of Israel. Follow the latest here.Israel-Gaza war | Some of the bodies of 15 Palestinian paramedics and rescue workers, killed by Israeli forces and buried in a mass grave in Gaza, were found with their hands or legs tied and had gunshot wounds to the head and chest, according to two eyewitnesses. The accounts add to evidence pointing to a potentially serious war crime on 23 March.UK news | More than 20 women have contacted police to say they fear they may have been attacked by the serial rapist Zhenhao Zou, with detectives fearing there may be even more victims to come. Zou, 28, was convicted last month of raping three women in London and seven in China between 2019 and 2024.US politics | Cory Booker, the Democratic US senator from New Jersey, has broken the record for longest speech ever by a lone senator by spending 25 hours and five minutes inveighing against Donald Trump in the chamber. Booker's speech was intended to highlight the grave and urgent" danger that Trump poses to democracy.Cinema | Val Kilmer, the actor best known for his roles in Top Gun, Batman Forever and The Doors, has died at the age of 65. His daughter Mercedes told the New York Times that the cause of death was pneumonia. Continue reading...

Exclusive: UK willing to placate Trump with lower digital services tax rate also encompassing non-US companiesBig US technology companies have been offered a significant tax cut by Keir Starmer in return for lower tariffs from Donald Trump's administration as the UK braces itself for a global trade war.The Guardian understands the UK government is willing to reduce the headline rate of its digital services tax (DST) in an attempt to placate the US president, while at the same time applying the levy to companies from other countries. Continue reading...

The US president wields tariffs not as a policy tool but as an instrument of pressure, rewarding loyalty and punishing defiance - even among alliesDonald Trump has probably not read much MichelFoucault. But he appears to embody the French philosopher's claim that politics is the continuation of war by other means". Nowhere is this more apparent than in his fondness for tariffs. He presents taxing foreign imports as a way to rebuild the American economy in favour of blue-collar workers left behind by free trade and globalisation. Yet he plainly thinks that politics is not about truth or justice. It is about leverage and supremacy.Britain is learning first-hand that Mr Trump, with his us-versus-them framing and taste for spectacle, is an accidental Foucauldian - using tariffs as tools of loyaltyand dominance, even against allies. If MrTrump follows through on his threat to impose a 20% tariff on all imports, UK growth will suffer. The effect depends on the response. No British retaliation would mean GDP 0.4% lower this year and 0.6% next. A global trade war would push that to 0.6% and 1%. Either outcome would wipe out the government's fiscal headroom. But while British policymakers fret over the shrinking margins of fiscal rules, Mr Trump sees no need to cloak power in objectivity.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. Continue reading...

Rolling coverage of the latest economic and financial news, as UK business secretary warns Britain will be hit by Liberation Day' tariffs

Wardrobe theatre, Bristol

Lidl and Ocado grow strongly, but Asda loses market share despite recent reset, Kantar figures show

Survey shows between 56% and 79% across seven countries in favour if Trump introduces Liberation Day' leviesA large majority of western Europeans support retaliatory tariffs against the US, a survey has suggested, if Donald Trump introduces sweeping import duties for major trading partners as expected this week.The US president appears likely to unleash a range of tariffs, varying from country to country, on Wednesday, which he has called Liberation Day. He also said last week that a 25% levy on cars shipped to the US would come into force the next day. Continue reading...

Ministers urged to act as energy, water, car tax, TV licences and a string of other increases squeeze households

President promises he will be very kind' but critics warn his strategy risks triggering chain reaction and global trade warAs Donald Trump prepared to unveil a swathe of reciprocal tariffs, global markets braced and some Republican senators voiced their opposition to a strategy that critics warn risks a global trade war, provoking retaliation by major trading partners such as China, Canada and the European Union.The US president said on Monday he would be very kind" to trading partners when he unveils further tariffs this week, potentially as early as Tuesday night. Continue reading...

Sir Richard Branson's airline returns to profitability but says consumer uncertainty is hitting bookingsVirgin Atlantic has warned of a slowdown in demand for transatlantic travel, prompting a further fall in the share price of rival British Airways' owner, IAG.Both UK long-haul carriers lean heavily on lucrative routes between London and North America to boost their profits, and analysts have warned that economic uncertainty and growing tension between the US and Europe could start to harm their business. Continue reading...

Shares slide after President Donald Trump says new reciprocal tariffs expected this week will include all nations, and Goldman Sachs warn US recession more likely

How the wave of increases will hit your household finances - and what you can do about it

Welsh mining | Bridget Christie | Ancient Greek | Nuuk ambitions | April foolYour report on the revival of goldmining in north Wales (Going for gold: coin marks hope of bringing Welsh mine back from the dead, 26 March)( made me recall a summer I spent camping in the area in the 1970s, when, in the village pub, Ienjoyedthe stories of locals who had worked in the mine. One theme was how the proceeds of illicitly siphoned gold had funded new houses in the locality. If true, this is perhaps one of the few examples of trickle-down economics in practice.

Downing Street says it reserves right' to respond to protect national interest when US levies are announced this weekDowning Street says it expects the UK to be hit by more tariffs when Donald Trump announces his latest round of trade barriers on Wednesday and said it reserves the right" to respond to protect the national interest.Ministers are now expecting the UK to be hit by a tariff that will apply to all countries as part of the US president's liberation day", despite hoping to have secured a carve-out. Continue reading...

February's dip in inflation was only a blip - the pain for consumers and the UK economy is poised to continue

Threat of deepening trade war on eve of Trump's Liberation Day' spooks investors across US, Asia-Pacific and EuropeStock markets across the world fell heavily on Monday after Donald Trump suggested that new tariffs he is expected to announce this week would hit all countries".Shares fell across Asia-Pacific markets, in Europe and in the US after the US president crushed hopes that reciprocal tariffs" expected on Wednesday would target only countries that have the largest trade imbalances with the US. Continue reading...

After myriad false starts and much fluctuation, the lingering question is not how far Trump can take his trade wars, but how far he willDonald Trump won back the White House with a promise to transform the US economy. Millions of Americans, struggling with higher prices and bigger bills, elected a president who pledged to revive his country's industrial heartlands - and leave the rest of the world to pick up the bill.On Wednesday - a day dubbed Liberation Day by the president and his aides - Trump has vowed to pull the trigger and impose an historic barrage of tariffs on goods from overseas he claims will fund an extraordinary revival. Continue reading...

Government fears hit from new US trade barriers but remains hopeful of progress in ongoing negotiationsMinisters believe Britain will be hit by more tariffs when Donald Trump unveils his latest round of trade barriers on Wednesday as part of what the US president is calling liberation day".On Sunday night, Keir Starmer spoke with Trump in what Downing Street described as part of productive negotiations" towards a deal. A No 10 spokesperson said both men had agreed talks between the two sides would continue at pace this week", adding: They agreed to stay in touch in the coming days." Continue reading...

Lincoln blockaded southern cotton, McKinley hit Britain with tariffs and Nixon abandoned the gold standard: a quick history of transatlantic economic meddlingAfter the American civil war began in 1861, President Abraham Lincoln tried to hamstring the economy of the southern states by blockading cotton exports. Yet that cotton was mostly sent to northwest England, and when supplies dried up in 1862, around 60% of cotton mills of Lancashire stopped production, causing huge hardship, job losses and hunger - and a riot in Stalybridge. Continue reading...

OBR's verdict of a long-term 0.4% boost to GDP from fewer building restrictions will have real political impact but there are gaps in fundingOne of the few bright spots in Rachel Reeves's bleak spring statement was the economic boost the forecasters expect to result from the government's planning changes.Reeves was so delighted to be able to announce some upbeat news, she pinched a phrase from Gordon Brown, calling the resulting extra 3.4bn for public services the proceeds of growth". Continue reading...

The chancellor's careful calculations for her spring statement are likely to be blown out of the water by a looming US trade war From more tax to rewriting budget rules: six alternative ways Reeves could raise moneyAs Rachel Reeves powered through her spring statement on Wednesday, telling the country she was restoring stability to the public finances" few in the House of Commons chamber seemed to know what to make of it all.Reeves's message did not seem to resonate with the underlying mood of uncertainty and anxiety at home and abroad. Many Labour MP nodded loyally along with her, trying to impress the whips. Others on the government benches looked grave. Growth forecasts for this year had been halved. Money would have to be raised to meet the chancellor's own fiscal rules, and the poorest would be the ones bearing thebrunt. Continue reading...

With the economy stagnating, this is the very worst time to depress demand in order to be seen to balance the books'Alas! Were it not for the fact that he was cremated, the great economist John Maynard Keynes would have been turning in his grave at the way the economics of last week's spring budget - sorry, spring statement - were greeted by most of the media.Of course, the principal culprit was the chancellor of the exchequer, Rachel Reeves. By tying herself to the mast of self-imposed fiscal rules, she managed to ensure that much of the commentary was about how she might have to raise taxes later this year, when the constraints of the fiscal straitjacket might force her to. Continue reading...

Here was a successful economic strategy in the making, marred by its abdication of responsibility to some of society's weakestSteering the British economy out of the mess Labour inherited is a slow and painful process, beset by economic and political hazards. Four Labour governments since the Second World War were derailed by financial crises - in 1949, 1967, 1976 and 2008 - and two Tory governments by crises in 1992 and 2022. Yet, in 2025, Britain is arguably economically more vulnerable than in any of those years. The task for the chancellor is to climb out of this deep pit with as much determination as possible while not risking a sterling or bond sell-off that would derail the government, party and country at least as severely as any of those earlier crises.Thus the much-criticised fiscal rules. These are not a self-imposed straitjacket to be abandoned at will but an attempted firewall to sustain financial market confidence while allowing scope to maintain and increase public investment. The promise to balance day-to-day public spending five years hence with day-to-day tax receipts is a minimum guarantor of fiscal credibility. But meeting this permits a second rule: to allow the state to borrow to maintain and increase capital spending, so protecting public investment from being raided as the soft option when the public budget comes under pressure - as every chancellor has done for more than 50 years, with results we live with daily. Continue reading...

The chancellor has been slated by politicians, the public and campaigners for pushing ahead with brutal welfare cuts - but there were other optionsThere is growing criticism of Rachel Reeves for her orthodox approach to managing the public finances. While it is clear that modest reductions in spending put forward in the spring statement cannot be described as a return to austerity, they are expected to deliver considerable harm to vulnerable people at a time when wealth inequality continues to rise.Critics also believe the chancellor's policies to improve living standards are flawed, and more radical reforms of the way Britain's economy operates need to be supported by the government. Here we look at some of the options open to the chancellor. Continue reading...

Major indices fell by about 2% as data shows rising prices and the Fed holds off on cutting interest ratesWall Street's primary indexes fell sharply on Friday, as data underscored underlying price pressures, stoking fears that the Trump administration's tariff maneuvers could further exacerbate inflationary trends.All the US's major indices had fallen by Friday afternoon with the S&P 500 closing down 2%, the Dow Jones declining 1.7% and the tech-heavy Nasdaq slumping 2.7%. Continue reading...

US stocks fall after latest consumer sentiment poll shows Americans are anxious about the state of the economyOver in Germany, the number of people out of work has risen at the fastest rate since October of 2024.The German labour office said the number of unemployed increased by 26,000 in seasonally adjusted terms to 2.92 million. Analysts polled by Reuters had expected that figure to rise by 10,000.March marks the start of the so-called spring recovery on the labour market. This year, however, the economic slump is noticeably slowing it down."One bright spot was the impressive 1.9% q/q (CE forecast 0.7% q/q) rise in consumers' real incomes in Q4. The 4.2% rise in 2024 as a whole suggests households experienced the strongest real income growth in nine years.With consumer spending hardly rising, at 12.0% in Q4 (up from 10.3% in Q3), the saving rate remains unusually high, suggesting households are choosing to save rather than spend the bulk of those gains. Continue reading...

Ministers seek carve-out from import taxes before 2 April deadline - but critics believe they may have offered too many concessionsUK ministers and senior officials at every level are holding talks with US counterparts this weekend in a last-ditch effort to secure a carve-out from swingeing import taxes.Government sources said ministers were raising Donald Trump's looming tariffs as the No 1" issue in every conversation with the US. Continue reading...

Sales volumes rise 1% in February after City economists had predicted fall amid weak consumer confidenceRetail sales in Great Britain rose last month amid a sharp increase in consumers spending at department stores, hardware shops and clothes outlets.Reflecting a stronger economic backdrop than feared, figures from the Office for National Statistics (ONS) showed sales volumes rose by 1% on the month, although spending at supermarkets fell after a bumper month in January. Continue reading...

Brian Unwin highlights just how much long-term financing has been lost through leaving the EU. But Fawzi Ibrahim says sovereignty is pricelessPolly Toynbee (Rachel Reeves is all about growth. So why won't she admit that Brexit is its worst enemy?, 25 March) demonstrates conclusively how much self-inflicted economic damage the UK is suffering from Brexit. She could also have mentioned the critical loss of investment from the EU's long-term financing bank, the European Investment Bank (EIB).During the UK's EU membership, the EIB invested some 150bn in mainly infrastructure projects in the UK, representing actual investment of two to three times that amount, taking account of the EIB's ability to attract other long-term co-financers. This key stream of investment and growth ceased with Brexit, and the successor regional investment banks established by the government have not come remotely near to replacing the EIB's level of finance. If, as Toynbee urges, the government were bold enough to face down the Brexiters, there would be at least an opportunity to renegotiate access to EIB finance. No other source of significant investment is in prospect.

Institute for Fiscal Studies also warns Reeves over her focus on sticking with fiscal rules regardless of real world eventsIn an interview with ITV's Good Morning Britain, Rachel Reeves, the chancellor, said she would not accept free tickets for concerts again in the future.Asked about the controversy about her decision to accept two corporate tickets for a Sabrina Carpenter concert at the O2, she repeated the line that she used at her press conference yesterday - that a family member wanted to attend the concert (presumably one of her children, but she did not say that), and that she accepted tickets for a corporate box because security concerns meant it was not deemed safe for her to get normal tickets for the auditorium.I'm just saying I wouldn't do it again. I felt I was doing the right thing. But I do understand perceptions.I am absolutely certain that our reforms, instead of pushing people into poverty, are going to get people into work.And we know that if you move from welfare into work, you are much less likely to be in poverty. Continue reading...

Chancellor may have to reconsider pledge not to raise taxes in light of risky and changing world', thinktank saysPensioners and wealthy people could be the target of tax increases at Rachel Reeves's autumn budget if the drastically worsening economic backdrop fails to improve, the Institute for Fiscal Studies (IFS) has said.After the chancellor's spring statement featured deep cuts to welfare to meet her fiscal targets, the UK's leading experts on the public finances said Reeves could be forced to come back later this year with tax rises. Continue reading...

Chancellor says UK not planning retaliatory tariffs on US at the moment' while PM calls move very concerning'Shares in automakers around the world fell sharply on Thursday after Donald Trump announced a 25% tariff on all car imports to the US in the latest escalation of his global trade war.The new levies on cars and light trucks will take effect on 3 April, a day after Trump plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit. Continue reading...

Rolling coverage of the latest economic and financial news

Even the census ignores them, but multilinguals could hold the key to Britain's social and economic future

The party of change' says it's bound by fiscal rules. What voters hear is that all governments are the same, and things will never get betterIt was change that won it. That was the single word to which Labour eventually boiled down all its complex ambitions; the six-letter slogan plastered triumphantly across its manifesto, because by the summer of 2024 change was pretty much the only thing the people of an exhausted country could all agree on. What kind of change exactly had by that point almost ceased to matter. Anything but this, millions of us told ourselves, as we scattered our votes in all directions.It was clear even at the time that there were tensions between that urgent, almost reckless hunger for change and the naturally careful, cautious instincts of a steady-as-you-go incoming prime minister and chancellor. But Labour papered over them with the impenetrable mantra that, actually, if you think about it, stability is change". Well, actually, it isn't. That line was never going to hold, and with Wednesday's spring statement it finally broke.Gaby Hinsliff is a Guardian columnist Continue reading...

Prices of some chocolate products have risen by 50% in a year while many have also shrunk in size, Which? reportsShoppers are shelling out for smaller eggs this Easter as shrinkflation takes a bite out of the favourite seasonal treat.The price of eggs made by big names including Cadbury, Mars and Terry's have risen by as much as 50% in some cases while some have also shrunk in size, according to research by consumer champion Which?. When pack sizes are reduced and prices stay the same, or even go up, it is often dubbed shrinkflation". Continue reading...

Labour is braced for a backlash from its MPs over welfare cuts called appalling' by a food bank charity

Amid poor economic growth forecasts and global instability, Rachel Reeves is trying to balance the books by cutting spending on benefits. So why is a Labour government choosing this path? John Harris is joined by the Guardian's political editor, Pippa Crerar, and political correspondent Kiran Stacey to unpick what was in the spring statement, and what it will mean for you Continue reading...

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More than 3 million families will lose out as a result of sweeping cuts to welfare, official analysis shows. This live blog is closed

Treasury watchdog halves growth forecast to 1% for 2025 in report issued alongside spring statement