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Sir Jim Ratcliffe’s car maker Ineos Automotive has accused the European Union of “sitting on their hands” before Donald Trump ramped up his global tariff war.
The British off-road vehicle manufacturer said it was “outraged that the tariff situation with the US has been neglected by the EU” after the US president announced 25pc tariffs on motoring imports.
More than €13bn (£10.9bn) was wiped off the value of European car makers after Mr Trump said he would put in place “permanent” levies which would “spur growth” in the American economy.
Ineos, which was founded by the Manchester United owner Ratcliffe, said the US president has been “very clear” on his intention to implement tariffs on the car industry, while his administration had been also” been clear about the consequences of non-engagement”.
Chief executive Lynn Calder said there needed to be action from EU politicians as “only they are in a position to address the issue”.
She said: “This is what happens when politicians sit on their hands.
“As a growing EU-based automobile brand, we are vulnerable to tariffs, and we need our politicians to support our business, our jobs and our economies. We need urgent and direct political intervention on tariffs.”
She added: “Fortunately, we have been planning for tariffs but there is only so much we can do to protect US customers from price rises.”
Mr Trump has warned he could hit the European Union and Canada with even larger tariffs if they both work together “to do economic harm to the USA”.
European Commission president Ursula von der Leyen said car tariffs were “bad for businesses, worse for consumers”.
06:07 PM GMT
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06:06 PM GMT
European stocks fall as carmakers hit by tariffs
European stocks fell today, with the pan-European Stoxx 600 dropping 0.4pc. In Paris, the Cac 40 lost 0.5pc, while in Frankfurt the Dax fell 0.7pc.
Among carmakers, Volkswagen shares dropped 1.5pc and Mercedes fell 2.7pc.
Bloomberg reported that Volkswagen subsidiary Porsche and Mercedes-Benz are expected to be the worst affected carmakers in Europe by Donald Trump’s fresh tariffs.
Roland Kaloyan, European equity strategist at Societe Generale, said: “The US tariff story is not only a negative for the global economy, but for European equities.”
05:27 PM GMT
Aston Martin falls to record low on tariff worries
Aston Martin sank by 6.7pc to an all-time low today as investors assess the effect of Donald Trump’s latest tariffs.
Shares in the FTSE 350 automobiles and parts sector fell 1.4pc to their lowest since early January.
Industrial metal mining stocks fell 2.1pc, as copper prices fell on concerns that Mr Trump’s auto tariffs could dampen demand for metals.
Anglo American, Glencore, Rio Tinto and Antofagasta were among the top decliners in the FTSE 100, falling between 1.4pc and 6pc.
The FTSE 100 fell 0.3pc and the FTSE 250 lost 0.5pc.
05:20 PM GMT
GM shares plunge as investors fear effect of tariffs
General Motors shares have plunged 7.1pc this afternoon amid fears that Donald Trump’s latest tariffs will undermine its business. Rival carmaker Ford fell 2.6pc.
Investors are worried that even US carmakers will feel the pain of car tariffs because their supply chains are spread throughout North America.
Joseph Spak, a UBS analyst, said: “There are still a lot of unknowns, but if this remains in place, there will clearly be some pain for the companies to digest.”
Among the uncertainties are how the US government will determine how to apply tariffs to parts that are compliant with the free-trade agreement that the United States and Mexico and Canada have, but are not made entirely within the United States. Tracking parts could be difficult, according to Mr Spak.
Automakers based outside the United States also sank. In Seoul, Hyundai Motor dropped 4.3pc. In Tokyo, Honda Motor fell 2.5pc, and Toyota Motor lost 2pc.
But US electric-vehicle makers Tesla and Rivian held up much better. They look to face less pressure from Trump’s tariffs because more of their production happens in the United States. Tesla rose 2.6pc and Rivian added 6.2pc.
04:55 PM GMT
US shares to ‘underperform in earnest’, warn economists
Wall Street is going to perform badly as Donald Trump ramps up his trade war, economists has predicted.
Capital Economics said that investors were now starting to take the US president’s tariff threats more seriously as Mr Trump’s plans become more concrete.
“Not surprisingly, stock markets with large auto sectors have been particularly affected. Among the worst performers were those in Germany and South Korea, where the auto sector represents roughly 7pc of the overall stock market. For instance, major German automakers’ stocks opened 4-5pc lower, before recovering a bit as the day progressed...
“The adverse reaction resembles the one after tariffs on Canada, Mexico and China were announced earlier this month, and it represents a marked change compared to what happened before. Until then, such announcements were met with indifference, with equities even rallying after Trump threatened reciprocal tariffs for the first time. The difference now is that the threats are becoming more concrete.”
They added: “US equities could also get a relative boost if enthusiasm for AI returns. But once the AI bubble bursts, if it hasn’t already, we suspect that US equities will begin to underperform in earnest.
“Arguably, Trump’s stagflationary policies, the uncertainty stemming from his mercurial policymaking, and the undermining of US and global institutions will not help in the long run.”
04:29 PM GMT
Wall Street struggles for direction as car tariffs sap sentiment
Wall Street is see-sawing between marginal gains and losses this afternoons, as investors grapple with Donald Trump’s latest trade gambit that sent car stocks into a tailspin.
Trump’s mercurial trade policies have injected a dose of uncertainty into markets, as investors fret over potential disruptions to supply chains, hampered investment, and the spectre of inflationary pressures threatening global economic growth.
Nicolas Lin, chairman of Aether Holdings, said: “We believe that he’s using [auto tariffs] as a trade negotiation. The markets are jittery because nobody really knows what’s going to happen and what will come out in future.”
Automakers faced significant pressure, with General Motors plummeting 6.8pc and Ford declining 2.2pc. Car-parts manufacturers such as Aptiv and BorgWarner each experienced a drop of more than 5pc.
Tesla defied the trend, rising 3.5pc. Analysts said that the electric vehicle maker might remain unscathed by the tariffs.
The S&P 500 and Nasdaq are currently flat, while the Dow Jones is down 0.2pc.
04:22 PM GMT
Germany’s Scholz says Trump’s tariffs will only create losers
Olaf Scholz, the German Chancellor, has said that Donald Trump’s decision to impose tariffs on cars is wrong and the policy would produce only losers.
“US president Trump’s decision is wrong,” he said. “The US has chosen a path at whose end lie only losers, since tariffs and isolation hurt prosperity, for everyone.”
04:20 PM GMT
Mexico pushes for special treatment in face of US auto tariffs
Mexico is working to carve out an exemption for its critical auto industry after Washington announced tariffs on imported vehicles, its economy minister has said.
Marcelo Ebrard, who has been meeting with top Trump administration officials in Washington today, said negotiations were ongoing to ensure preferential treatment for Mexico.
“If they are going to change the system, if we are going to a system of such high tariffs, what we have to seek is a preferential treatment for Mexico in a way that we have conditions that protect our jobs and economic activity in Mexico.”.
Claudia Sheinbaum, the Mexican president, said she planned to meet with automakers including Ford, General Motors and Stellantis, to better understand how their operations are being affected.
“We’ll meet with the automakers ... to understand, first of all, how it affects them, and how we can promote the internal market [within in United States-Mexico-Canada Agreement (USMCA)].”
USMCA-compliant auto parts will stay duty free until US agencies can determine a process to apply tariffs to their non-US made content, according to the White House.
Mexico exported 2.5m vehicles to the United States in 2024, according to S&P Global Mobility.
04:11 PM GMT
IMF says US not headed for recession despite trade war
The International Monetary Fund does not foresee a US recession despite Donald Trump’s tariff plans, it said this afternoon.
Julie Kozack, an IMF spokesman, said the duties imposed on goods from Canada and Mexico, if sustained, would have a “significant adverse effect” on those countries’ economic outlooks.
Three days before Trump took office on Jan 20, the IMF raised its 2025 US growth forecast to 2.7pc from the 2.2pc envisioned in October. This was based on a strong labour market and accelerating investment.
“Since then, of course, there have been many developments,” Ms Kozack said. “Large policy shifts have been announced, and the incoming data is signalling a slowdown in economic activity from the very strong pace in 2024 [but] recession is not part of our baseline” for the US.
04:07 PM GMT
Hungary blames ‘serious mistake’ by EU for US tariffs
Hungary has blamed the EU for the 25pc tariffs US president Donald Trump announced on all imported cars, saying the European bloc should have lowered its own tariffs.
The US duties take effect in the middle of next week and will impact foreign-made cars and light trucks. Key automobile parts will also be hit within the month.
“Europe has indeed made a serious mistake,” said Gergely Gulyas, chief of staff to Hungarian prime minister Viktor Orban.
He described Brussels’ own tariffs of 10pc - applicable for the entire 27-nation European Union - as “completely incomprehensible”.
“The least Europe should have done - and should have done no later than the day Trump officially took office - was to lower our tariff to 2.5pc,” like those of the United States had until now, he added.
World powers on Thursday blasted Trump’s steep tariffs, vowing retaliation as a widening trade war intensifies.
Orban, a nationalist who has ruled Hungary since 2010 and frequently criticises Brussels, has cultivated warm ties with Mr Trump’s administration.
“Now we’re stuck with this situation we should be negotiating with the Americans,” Mr Gulyas said.
“We’ve seen before how President Trump delayed the implementation of certain measures, so that possibility still exists - though it’s not guaranteed in this case,” he added.
04:02 PM GMT
Ferrari to raise US prices after Trump imposes tariffs
Ferrari plans to increase the prices of some of its cars sold in the United States in response to new tariffs, it said today.
The luxury carmaker, which manufactures all its cars at its Maranello facility, in northern Italy, said it would increase prices, by a maximum of 10pc.
The company said: “The commercial terms will remain unchanged for orders of all models imported before April 2 2025, and for orders of the following three families - Ferrari 296, SF90 and Roma - regardless the import date. For the current remaining models, the new import conditions will be partially reflected on pricing, up to a maximum 10pc increase.”
Analysts at investment research group Bernstein said that Ferrari’s American customers would not be put off by the price rises. “Any increase in new prices will be somewhat cushioned by the knowledge that the customer’s other Ferraris in their garage have seen their values rise,” they said.
Ferrari shares rose about 1pc today after saying its would stick largely to its financial targets for this year.
03:45 PM GMT
Middle and working class Americans to be hit hardest by car tariffs, says economist
Donald Trump’s car tariffs will hurt middle and working class Americans, a leading US economist has said.
Mary Lovely, senior fellow at the Peterson Institute for International Economics, said: “We’re looking at much higher vehicle prices. We’re going to see reduced choice...
“These kinds of taxes fall more heavily on the middle and working class.’’
03:42 PM GMT
Drugmakers switch from ships to planes in race against Trump tariffs
European drugmakers are sending more medicines by air to the US amid fears that Donald Trump could slap tariffs on their products next week.
Two European-headquartered drugmakers told Reuters they have been sending as many of their medicines across the Atlantic as possible over the past few weeks. They have reportedly heard other pharmaceuticals companies were doing the same.
One of the executives said his company was “scenario planning” for possible tariffs and shipping more medicines by air.
A source at a third international drugmaker said they were quickly moving in available stock to the US from overseas in an effort to get ahead of tariffs.
Pharmaceutical products have long been spared from trade wars because of the potential damage to patients.
But Mr Trump’s move to increase tariffs has raised expectations that medicines will join the list.
03:33 PM GMT
Britain should be exempted from car tariffs, says UK-US campaigners
Britain should not be hit with Donald Trump’s tariffs because of its balanced trade relationship with the US, the head of a lobbying group has said.
BritishAmerican Business chief executive Duncan Edwards said the introduction of new tariffs “should not come as a surprise” and urged the Government to resist retaliation to the 25pc levies on car makers.
He said: “Setting aside the broader question of whether this part of the new economic agenda will benefit the US in the long term, BritishAmerican Business believes there is a very strong case to be made that the UK should be exempted from these and other tariffs that may be announced next week, and from the Steel and Aluminium Tariffs already in place.
“Unlike other trading relationships, the US and UK do not have a trade imbalance, nor is there a significant disparity in wage structures or labour standards and if anything, the UK is at a disadvantage with its higher energy costs.
“We urge the UK not to retaliate, to listen carefully to the American concerns, and to continue the efforts to reach an agreement that focuses on the future facing businesses at which both countries excel, and which provides the exemption that will benefit both economies.”
Thanks for following these updates so far. We’ll hand you over now to Alex Singleton who will keep you informed about the US president’s latest plans.
03:07 PM GMT
Car makers face $6,000 blow per vehicle from Trump tariffs
Car makers face a blow worth $6,000 (£4,635) per vehicle under Donald Trump’s new tariff plans, according to a Wall Street banking giant.
Morgan Stanley warned that consumers would face a 10 to 12pc increase in costs if manufacturers were to pass on 80pc-100pc of their increase in costs.
However, the US president said he would make the interest on car loans used to buy US-made vehicles tax deductible, which analysts said would “offset around one-third of the potential price increase, still impacting the demand”.
Analyst Javier Martinez de Olcoz Cerdan said European car makers “will have to decide to either subsidise the tariffs through lower margins or face volume decline in the US, or what seems more likely a combination of both”.
He added that Vauxhall maker Stellantis and Porsche would be “most exposed” to the impact from the tariffs.
Porsche produces 100pc of its cars in Europe while Stellantis makes just under half its vehicles outside America, he said.
02:38 PM GMT
Starmer in ‘intense discussions’ with Trump to avoid trade war
Sir Keir Starmer said he is engaged in “intense discussions” with Donald Trump and his administration as he seeks to find ways to limit the impact of the US president’s latest tariffs on the car industry.
The Prime Minister said he would keep “all options on the table” but was clear that the motoring industry “does not want a trade war”.
Speaking after a summit of European leaders in Paris, Sir Keir admitted the tariffs were “very concerning”.
He said: “We need to keep, as ever, pragmatic and clear-eyed. We are engaged, as you know, in intense discussions with the US on economy arrangements on a number of fronts but including to mitigate tariffs.
“We’ll continue in that way because I think that rather than jumping into a trade war it is better pragmatically to come to an agreement. That is why we are intentionally engaging in the way that we are.
“We always have to put the national interest first and that’s why I’ve also been clear that as we engage in those negotiations, those discussions, we will keep all options on the table.
The industry doesn’t want a trade war but it’s important that we keep all options on the table.
“I’m working hard with others to make progress on economic arrangements which I hope will better serve our country than a trade war.”
02:26 PM GMT
Macron: Trump has chosen bad time to launch tariffs
Emmanuel Macron said Donald Trump had chosen a bad time to impose tariffs on the EU as the bloc ramps up spending on defence.
Speaking after a summit of European leaders in Paris, the French president said markets in the US were not supportive of the US tariff plans.
He spoke after a meeting that has sought to establish a European “coalition of the willing” to protect Ukraine, after Germany agreed to loosen its debt rules and free up billions for military spending.
Mr Macron said he would speak with Mr Trump later, adding: “We’ll help all sectors hit by US tariffs.”
02:13 PM GMT
US stocks fall despite better than expected economic growth
Wall Street stocks have dropped despite data showing the US economy expanded at a slightly faster pace than estimated in the final three months of last year.
The three main US indexes in New York were all lower as Donald Trump’s car tariffs hit automotive stocks, with General Motors falling as much as 9.2pc.
The trade war overshadowed data showing the world’s biggest economy grew at an annual rate of 2.4pc in the fourth quarter of 2024, up from a previous estimate of 2.3pc, according to the Department of Commerce.
The US economy has been resilient in the face of high interest rates in recent times as consumers continued spending while the jobs market remained relatively healthy.
But there are increasing fears that a growing range of tariffs imposed by Mr Trump, and the stop-start approach to their rollout so far, could buffet businesses and fuel uncertainty.
01:56 PM GMT
Bentley ‘monitoring situation closely’
Luxury carmaker Bentley has said it open markets and stable trade relations “are essential for a competitive economy” in the wake of Donald Trump’s tariff proposals.
A spokesman said: “Following the proposed tariff changes for vehicle imports to the United States of America, we are monitoring the situation closely, assessing our response and will make further announcements on April 2nd.
“As a major UK exporter, we continue to advocate for open markets and stable trade relations. These are essential for a competitive economy and especially for the automotive industry.”
01:36 PM GMT
US stocks fall as car tariffs loom
Wall Street’s main indexes opened lower after President Donald Trump’s latest tariff gambit sent car stocks into a tailspin.
The Dow Jones Industrial Average fell 110.22 points, or 0.3pc, to 42,344.57, while the S&P 500 lost 16.77 points, or 0.3pc, to 5,695.16.
The tech-heavy Nasdaq Composite lost 67.55 points, or 0.4pc, to 17,831.47.
01:23 PM GMT
Ratcliffe’s car maker ‘outraged’ at EU neglect over Trump tariffs
Sir Jim Ratcliffe’s car maker Ineos Automotive has accused the European Union of “sitting on their hands” before Donald Trump ramped up his global tariff war.
The British off-road vehicle manufacturer said it was “outraged that the tariff situation with the US has been neglected by the EU” after the US president announced 25pc tariffs on motoring imports.
More than €13bn (£10.9bn) was wiped off the value of European car makers after Mr Trump said he would put in place “permanent” levies which would “spur growth” in the American economy.
Ineos, which was founded by the Manchester United owner Ratcliffe, said the US president has been “very clear” on his intention to implement tariffs on the car industry, while his administration had been also” been clear about the consequences of non-engagement”.
Chief executive Lynn Calder said there needed to be action from EU politicians as “only they are in a position to address the issue”.
She said: “This is what happens when politicians sit on their hands.
“As a growing EU-based automobile brand, we are vulnerable to tariffs, and we need our politicians to support our business, our jobs and our economies. We need urgent and direct political intervention on tariffs.”
She added: “Fortunately, we have been planning for tariffs but there is only so much we can do to protect US customers from price rises.”
12:45 PM GMT
PM taking ‘pragmatic approach’ to US trade talks
Sir Keir Starmer will take a “pragmatic approach” to discussions with the US after Donald Trump imposed tariffs on car makers, Downing Street has said.
The Prime Minister’s official spokesman told reporters: “We’re obviously disappointed by the US decision to impose tariffs on the automotive industry and I think as we’ve said previously we’ll keep all options on the table.
“But also we’ve said we’re taking a pragmatic approach to our discussions with the United States, we continue to have productive conversations on securing a wider deal. Those conversations are ongoing and will continue.”
Asked whether Tesla would be targeted by the Government, the spokesman added: “We’re not singling out individual companies, we’re having a discussion with the United States about a wider economic deal. We’ll only act in the national interest.”
12:24 PM GMT
Car stocks poised to drop on Wall Street
Motoring stocks were poised to extend losses on Wall Street after President Donald Trump’s latest tariff announcement.
The benchmark S&P 500 index and the tech-focused Nasdaq broke their longest winning streak in over a month on Wednesday.
General Motors slid another 6.5pc in premarket trading, while Ford fell 2.9pc. Tesla was little changed.
Wedbush analyst Daniel Ives said: “Investors will be frustrated by this announcement with few details... as this 25pc number is hard to digest.”
Ahead of the opening bell, the Dow Jones Industrial Average was up 0.1pc, the S&P 500 was down 0.1pc and the Nasdaq had fallen about 0.3pc.
12:05 PM GMT
Business Secretary refuses to rule out scrapping tax on tech giants
Jonathan Reynolds declined to rule out changing or scrapping the digital services tax (DST) in exchange for exemptions from US tariffs, saying the tax was not something that “can never change”.
Asked whether he would rule out scrapping the tax on tech firms, the Business Secretary said: “Tech companies paying a fair amount of tax in the UK is something that is incredibly important to us, and I think the British people.
“You will know that DST was introduced as a temporary measure in lieu of an international agreement.”
He added: “We have always been of the view as a country that this has to be something ideally agreed on an international basis, but it’s not that DST has been put in place as something that can never change or we can never have a conversation about it.
“So we are both committed to making sure tech companies pay a fair amount of tax in the UK, for their economic activity in the UK, but we understand the US has cited, as it has to countries around the world, concerns about the specific structure of that.
“So in terms of this conversation, they will want to talk to us about that, it’s not a major part of the conversation though I understand it’s obviously newsworthy given the prominence of all tech companies in our lives, but let’s remember what is our objective as a country here, it’s that fair rate of tax.
“But we have always been willing, the whole point of this was to do that on an international basis.”
11:48 AM GMT
Reynolds interrupted by pro-Palestinian protesters during trade speech
Business Secretary Jonathan Reynolds was interrupted by pro-Palestinian protesters calling for an end to the sale of F35 jet parts to Israel as he tried to talk up Britain’s trade credentials.
At the start of Mr Reynolds’ appearance at a conference on trade hosted by the think tank Chatham House, a demonstrated shouted: “This man and hi Government are complicit in genocide.
“The F35s are massacring Palestinian children. They have not stopped the trade of F35s.”
After the protester was removed from the event, Mr Reynolds said: “We have suspended arms exports to Israel.
“We have not suspended F35s because they are integral to our national security and the defence of Ukraine, and people will know the supply chain for the F35 means they cannot be isolated to one country.
“That decision was laid out very clearly in Parliament, so I’m quite happy if he wants to ask a question rather than jump on stage to have that engagement with him.”
He was then interrupted by another protester waving a Palestinian flag and calling for an end to F35 exports, who was subsequently removed.
11:35 AM GMT
Reynolds urges ‘cool heads’ as carmakers hit with US tariffs
Business Secretary Jonathan Reynolds has said it is a time for “cool heads” as the UK engages with the US over tariff plans despite holding a “different set of views” on trade policy.
“With the US, we’ve said that obviously we have a different set of views to where they’re coming from... you can understand and engage with that even if you don’t necessarily agree with it,” Mr Reynolds told a conference held by think tank Chatham House.
Decisions in the US come from a “belief on their side that it hasn’t got the right tools to deal with particularly overcapacity, and overproduction in some key sectors”, he said.
“This is a time for cool heads and pragmatism and this is how we’re approaching these things.”
The minister admitted that there were “concerns and tensions”, but also said that “the basis of a UK trade strategy has got to be in the UK’s national interest”, adding: “I can’t fight battles for other countries.”
11:20 AM GMT
European car sector to be ‘heavily impacted’ warn analysts
Europe’s car sector will be “heavily impacted” by Donald Trump’s tariffs as the US accounts for a fifth of the EU’s exports, analysts said.
Lindsay James, a strategist at Quilter, said America also accounted for around 18pc of UK automotive exports.
He said: “In a sector that is vital for the European economy in particular, accounting for around 7pc of GDP (gross domestic product) and 6pc of employment, there will an obvious blowback on a sector that has already faced considerable headwinds from a painful transition to EVs alongside tighter regulations, in addition to slower replacement cycles from drivers and higher energy costs.
“This has led to the European autos index falling to a level that is more than 15pc lower than a decade ago even before this latest blow.”
10:49 AM GMT
Trump trade war could wipe 1pc off GDP, warns budget watchdog
The budget watchdog warned a full-blown tariff war with the US could wipe 1pc off gross domestic product next year.
The Office for Budget Responsibility (OBR) said in its report alongside Rachel Reeves’s Spring Statement that Donald Trump’s levies could derail the Chancellor’s hopes of balancing the books, forcing her to implement more cuts or tax hikes.
OBR chairman Richard Hughes told BBC Radio 4’s Today programme: “This represents the crystallisation of one of the risks that we highlighted around our central forecast, which was one of escalating global trade tensions.”
The “worst-case scenario” would come about if Mr Trump imposed 20pc tariffs on British goods and the UK reciprocated in kind.
“The UK exports, in terms of goods to the US, around 2pc of GDP,” Mr Hughes said. “Car exports are about 10pc of that.
“So that’s affecting directly UK goods exports of around 0.2pc of GDP. So what Trump’s announced overnight is not the whole of that worst-case scenario, but it’s elements of it, and it’s the beginning of that risk side.”
10:31 AM GMT
British Steel blames Trump as it announces plan to shut historic Scunthorpe site
British Steel blamed Donald Trump as it announced plans to close its two blast furnaces in Scunthorpe, putting up to 2,700 jobs at risk.
Jingye, the Chinese steel group, said it had launched a consultation with its workforce and unions after the “imposition of tariffs” had made the blast furnaces and steelmaking operations “no longer financially sustainable”.
Mr Trump announced in February that he was imposing 25pc tariffs on steel and aluminium imports to the US. The levies came into effect earlier this month.
Jingye said it would end mothball the furnaces and reduce steel rolling mill capacity at Scunthorpe, which is currently the only site in the UK that can make virgin steel.
It said it has invested more than £1.2bn to maintain operations since 2020 but said losses have ballooned to around £700,000 a day.
The company blamed “highly challenging market conditions, the imposition of tariffs, and higher environmental costs relating to the production of high-carbon steel”.
British Steel chief executive Zengwei An said: “We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel.
“But we believe this is a necessary decision given the hugely challenging circumstances the business faces.
“We remain committed to engaging with our workforce and unions, as well as our suppliers and customers during this time.”
10:19 AM GMT
Trump trade war will lower inflation, says Bank of England policymaker
Donald Trump’s global trade war should mean lower inflation in the UK because diverted goods from China will bring prices down, according to a Bank of England rate-setter.
The US president’s aggressive tariffs policies will likely drive up the cost of goods the UK buys from America, but this will be more than offset as other exporters look for new markets and global growth slows, Swati Dhingra said.
Speaking at a conference in South Africa, she said: “I think my general view would be that we would expect a negative overall adjustment in UK prices.”
Ms Dhingra, who is a member of the Bank of England’s Monetary Policy Committee (MPC), said that global trade prices fell during Mr Trump’s first global trade war in 2018, which suggests that the same is likely to happen again.
Ms Dhingra said: “What happened in the last Trump trade when steel tariffs got put on, there was a 50pc drop in steel prices because Chinese exporters now needed new markets to be sending their goods to. So we end up in a situation where global prices in general see somewhat of a reduction.
“Add to that the fact that global activity is likely to also be negatively impacted.”
09:58 AM GMT
‘Even though I’m irritated with Trump, I get it’
Donald Trump is embarking on a “genius plan” according to Telegraph readers as he turns his tariff trade war towards cars.
Others thought the US president has proven to be “all showmanship and no substance” who is “about to learn that it’s a bit late to try an un-globalise world trade without a lot of pain”.
Here is selection of views from the comment section below and you can join the debate here:
09:34 AM GMT
Trump tariffs wipe £11bn off European carmakers
More than €13bn (£10.9bn) was wiped off the value of European car makers in early trading after Donald Trump ramped up his global trade war.
Manufacturers across the Continent slumped as much as 3.4pc overall after the US president announced a 25pc tariff on all imported vehicles and parts on Wednesday.
Porsche, Stellantis and Mercedes-Benz were last all down more than 4pc, with BMW down 3pc and Volkswagen dropping about 2pc.
09:19 AM GMT
Trump tariffs ‘very serious’, says Stride
The 25pc tariff on vehicles imported to the US announced by the White House on Wednesday is “very serious”, shadow chancellor Mel Stride has said.
Asked whether he would respond with tariffs, Mr Stride told Sky news: “Well, I think we have to wait and see.
“I’m not in the room around the negotiations that are going on at the moment, but this is very serious, as you say.
“In fact, our second largest export market for cars, about 100,000 cars sold in the states from this country every year and a lot of livelihoods at stake here, but the important thing is to try and get this deal done in America, so that we get carved out of these tariffs.
“I do think the Government could be quicker to the party engaging quicker in that endeavour.”
09:04 AM GMT
Jaguar Land Rover faces risk from tariffs
Jaguar Land Rover (JLR) could be one of the UK vehicle manufacturers most affected by tariffs.
Around four out of five cars made in the UK are exported and figures from industry body the Society of Motor Manufacturers and Traders (SMMT) show the US is the second largest export market after the European Union for cars built in the UK.
Some 16.9pc of UK car exports were to the US last year.
JLR revealed in January it had enjoyed a 44pc surge in wholesale exports to North America during the final three months of last year.
A JLR spokesman said: “We are waiting for further information on President Trump’s announcement of 25pc tariffs on all auto imports into the USA and we will make a further statement, as appropriate, in due course.”
SMMT chief executive Mike Hawes said the announcement of tariffs was “not surprising but, nevertheless, disappointing” and urged both governments to strike a deal that avoids further damage.
“If, as seems likely, additional tariffs are to apply to UK-made cars, it’s a blow to a long-standing and productive relationship,” he said.
08:46 AM GMT
Tesla faces ‘significant’ impact from Trump tariffs, warns Musk
Elon Musk warned that Tesla would not be “unscathed” by Donald Trump’s plan to hit foreign car and parts makers with 25pc tariffs.
He said the “cost impact is not trivial” as many parts of the electric vehicle manufacturer’s parts come from outside the US.
08:25 AM GMT
Car shares drop after Trump announces tariffs
Shares of European carmakers fell sharply after Donald Trump said he would impose 25pc tariffs on foreign motoring imports to the US.
Major brands across the Continent jointly declined by 3pc after the US president said he would impose the levies “on all cars that are not made in the United States”.
Vauxhall maker Stellantis fell 6.4pc while Mercedes dropped 4.6pc. BMW and Porsche both declined more than 4pc.
On the FTSE 250, Aston Martin suffered a 6.3pc hit to its share price.
08:17 AM GMT
Stride pushes for trade deal to protect carmakers from tariffs
The UK needs to ensure it has the “right relationship” with the US and to put a trade deal in place to ensure it is “protected” from tariffs, the shadow chancellor has said.
Mel Stride said the US is a “hugely important trading partner” as she was asked whether Britain should confront the US president over his trade war.
ITV’s Good Morning Britain presenter Richard Madeley asked: “The Lib Dems this morning are saying that it’s time that the British government stood up to Donald Trump, confronted him and stopped being pushed around by him - what would the Conservatives think?”
Mr Stride replied: “I think they’re a hugely important trading partner.
“So if you take car trade, for example, and what may be about to happen on tariffs now, they’re our second largest export market, over 100,000 cars exported there per year, and a lot of jobs and livelihoods that depend upon that.
“So it’s very important in that context, for example, to get some kind of trade deal in place that means we are protected from those tariffs.”
He added: “I think it’s a balance between we want to make sure that we have the right relationship with America on all sorts of levels, including security as well as economic in order to make sure we get the very best for our country.”
08:05 AM GMT
UK markets slump after Trump car tariffs
The FTE 100 dropped as trading began after Donald Trump announced car tariffs hours after the Chancellor delivered her Spring Statement.
The UK’s internationally-focused stock index fell by 0.5pc to 8,646.04 while the midcap FTSE 250 declined 0.4pc to 19,962.82.
07:56 AM GMT
Reeves fears reciprocal tariffs would ‘escalate’ Trump trade war
Rachel Reeves said the Government does not want to “escalate” Donald Trump’s global trade war as he imposed 25pc tariffs on car makers.
The Chancellor said Britain said she wants to see how current talks between British and American trade officials progress.
Asked if she would consider reciprocal tariffs, Ms Reeves told Sky News: “We’re not at the moment in a position where we want to do anything to escalate these trade wars.
Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we’ve worked so hard to get a grip of inflation.
At the same time it will make it harder for British companies to export.
“We are looking to secure a better trading relationship with the United States. I recognise that the week ahead was important. There are further talks going on today so let’s see where we get to.
07:45 AM GMT
Reeves understands why Trump has launched trade war
Rachel Reeves said she understands the reasoning behind Donald Trump’s tariff war after he unleashed 25pc tariffs on global carmakers.
The Chancellor said she believes in “free and open trade” and pointed out that the UK and the US have balanced trade.
“There’s neither a surplus nor a deficit,” she told Sky News.
“The US are concerned - and I get this - about countries that run persistent large surpluses with the US. The UK is not one of those countries which is why we are in extensive talks at the moment.
“Let’s see where they get to in the next week.”
07:27 AM GMT
Reeves: ‘We’re having extensive talks’ with US on trade
The Government is in discussion with the US about what tariffs will mean for the UK, Rachel Reeves said.
Asked about Donald Trump’s latest announcement that car imports would be slapped with 25pc tariffs, the Chancellor told Times Radio: “The Prime Minister went to Washington just a couple of weeks ago and met the US president, and we are now having extensive talks with our counterparts in the US to protect trade between our countries, those conversations will continue.
“Obviously the announcements of tariffs is something that the US plan to bring in next week, but we are in discussions about what that means for the UK.
“A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined.
“I believe - and we make this case to the United States - that free trade, fair trade, is good for both of our countries, but let’s see where we get to in the next few days.”
07:12 AM GMT
Hit Teslas with tariffs, ministers urged
The Government needs to “toughen up” and start placing retaliatory tariffs on US carmakers like Tesla, the Liberal Democrats said.
Asked what the Lib Dem response would be to the latest 25pc tariffs on all car imports to the US, the party’s deputy leader Daisy Cooper told BBC Radio 4’s Today programme: “I think there’s only one language that Donald Trump understands, and that is the language of strength.
“What we Liberal Democrats are very concerned about is that the Government strategy so far seems to be to cower in the corner and just ask Donald Trump to be nice to us and just to hope that he doesn’t do anything nasty.
“That is not a strategy. So we think the Government needs to toughen up.
“We think the Government needs to start preparing for retaliatory tariffs, and that those tariffs, that preparation, should start by looking at putting tariffs on Tesla cars, because clearly Elon Musk is a huge backer of Donald Trump, and that’s where we would start.”
Ms Cooper later urged the Chancellor to rule out tax breaks for “US tech barons” like Mr Musk, including ruling out scrapping or reducing the digital services tax.
06:50 AM GMT
Pound rises as Trump announces tariffs
The pound has risen in overnight trading after Donald Trump said he would impose 25pc tariffs on carmakers.
Sterling was up 0.4pc to $1.293 as the US currency was weakened by the trade uncertainty.
The rise in the pound comes a day after declining about 0.7pc following an unexpected drop in inflation and Rachel Reeves’s Spring Statement.
06:42 AM GMT
Von der Leyen: Car tariffs ‘bad for business, worse for consumers’
European Commission president Ursula von der Leyen has described Donald Trump’s car tariffs as “bad for businesses, worse for consumers”.
She added: “We will now assess this announcement, together with other measures the US is envisaging in the next days.
“The EU will continue to seek negotiated solutions, while safeguarding its economic interests.”
06:18 AM GMT
Trump threatens bigger tariffs on Canada and EU
Donald Trump said on Thursday that larger tariffs could be placed on the European Union and Canada if they both work together “to do economic harm to the USA”.
“If the European Union works with Canada in order to do economic harm to the USA, large-scale tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had,” he said in a post on Truth Social.
06:16 AM GMT
Japan warns of ‘significant impact’ on US economic relations
Japan’s government has warned of a “significant impact” on its economic relations with the United States and on the global economy because of Mr Trump’s tariffs.
“We believe that the current measures and other broad-based trade restrictions by the US government could have a significant impact on the economic relationship between Japan and the US, as well as on the global economy and the multilateral trading system,” spokesman Yoshimasa Hayashi told reporters.
05:35 AM GMT
Britain’s car industry hits out at Trump’s tariffs
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), warned the move risks hurting both UK and US manufacturers and consumers.
He said it was “not surprising but, nevertheless, disappointing” and urged both governments to strike a deal that avoids further damage.
“If, as seems likely, additional tariffs are to apply to UK-made cars, it’s a blow to a long-standing and productive relationship,” Mr Hawes said.
He called on both sides to “come together immediately and strike a deal that works for all”.
“US consumers enjoy vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America,” he said.
“Rather than imposing new tariffs, we should be creating opportunities for both British and American manufacturers as part of a mutually beneficial relationship - benefiting consumers and creating jobs and growth on both sides of the Atlantic.”
05:05 AM GMT
Tariffs could hit Japan’s economy hard
Analysts said the move could deal a heavy blow on Japan’s economy given its reliance on auto exports to the US.
Vehicles made up 28.3pc of Japan’s total exports to the US in 2024, the biggest ratio among all items, according to Ministry of Finance data.
The auto industry makes up roughly 3pc of Japan’s gross domestic product (GDP) and has been the driver of recent wage hikes, as automakers distribute the huge profits they reaped overseas to their employees.
Takahide Kiuchi, executive economist at Nomura Research Institute (NRI), expects the new tariffs to push down Japan’s GDP by around 0.2pc.
“The Trump tariff has the potential to immediately push Japan’s economy into deterioration,” he said.
04:42 AM GMT
Asian markets fall, but ‘complete carnage’ not expected
While heavy losses in carmakers spurred Asian markets to tumble, experts are not expecting a tumultuous day.
“Asia equity markets have traded lower, however it’s not feeling at this point like we are going to see a day of complete carnage out there,” Tony Sycamore, analyst at IG, said.
“I think the timing has caught people off guard, but I don’t think the detail of the announcement so much caught people off guard... so now it’s just how the Europeans, South Koreans and the Japanese choose to respond.”
04:26 AM GMT
Japan putting ‘all options on the table’
Tokyo will put “all options on the table” in dealing with Washington’s tariff announcement, Japanese Prime Minister Shigeru Ishiba said on Thursday.
“Japan is a country that is making the largest amount of investment to the United States, so we wonder if it makes sense for (Washington) to apply uniform tariffs to all countries. That is a point we’ve been making and will continue to do so,” he told Parliament.
“We need to consider what’s best for Japan’s national interest. We’re putting all options on the table in considering the most effective response.”
04:24 AM GMT
Canada considers retaliatory tariffs
Canada’s Prime Minister Mark Carney called Donald Trump’s new tariffs a “direct attack” and said he would consider retaliatory measures.
Mr Carney told reporters he would be convening a high-level cabinet meeting on Thursday to decide on a response.
“We will defend our workers, we will defend our companies, we will defend our country, and we will defend it together,” he said in Kitchener, Ontario.
The tariffs are set to damage the highly-integrated North American auto industry.
Asked when Canada would react, Mr Carney said: “It will happen soon ... we have options. We can introduce retaliatory tariffs.”
04:19 AM GMT
What happened overnight
On Wall Street, stocks closed sharply lower as investors braced for escalations in Donald Trump’s trade war. The S&P 500 fell 1.1pc, closing at 5,712.20, the Nasdaq Composite fell 2pc, finishing at 17,899.02, and the Dow Jones Industrial Average fell 0.3pc, to 42,454.79.
US-listed car giants tumbled with General Motors, Ford and Stellantis all deep in the red in after-hours trade.
In the bond market, the yield on benchmark 10-year US Treasury notes rose to 4.353pc from 4.336pc late on Tuesday.
Asian shares also skidded, with Japan’s Nikkei falling 1.2pc, led by heavy losses in automakers.
Toyota Motor shares tumbled 3.4pc, and both Mazda Motor and Subaru plunged about 6pc.
South Korea’s KOSPI dropped 0.7pc. Shares of Chinese EV makers also fell, with Nio shedding 2.8pc and Xpeng dipping 1.1pc.
China’s blue chip index and Hong Kong’s Hang Seng were both down 0.3pc.
MSCI’s broadest index of Asia-Pacific shares outside Japan also dropped 0.6pc.
04:19 AM GMT
5 things to start your day
Trump hits car industry with $100bn of tariffs | President announces 25pc levy on vehicles not made in the US in blow to auto industry in Britain and EU
Trump’s America ‘risks debt default by August’ | US spending watchdog warns of looming crisis as government loses ability to borrow
‘Everyone loses’ under Trump’s economic policies, says French bank chief | François Villeroy de Galhau warns that tariffs will hurt global economy and US growth
Jeremy Warner: Reeves is taking an astonishing risk with the public finances | The Chancellor’s Spring Statement fails to meet the challenges of these extraordinary times
Nigel Farage gets NatWest payout over debanking row | Reform leader’s Coutts account was closed in 2023 because of his political views
04:18 AM GMT
Good morning
Donald Trump said last night that he was placing 25pc tariffs on car imports, a move the White House claims would foster domestic manufacturing. But analysts feared it could also put a financial squeeze on carmakers that depend on global supply chains.
“This will continue to spur growth,” Mr Trump told reporters. “We’ll effectively be charging a 25pc tariff.”
The tariffs, which the White House expects to raise $100bn in revenue annually, could be complicated as even US carmakers source their components from around the world.
The tax hike starting in April means carmakers could face higher costs and lower sales, though Mr Trump argues that the tariffs will lead to more factories opening in the United States.
He said it would end what he judges to be a “ridiculous” supply chain in which auto parts and finished vehicles are manufactured across the United States, Canada and Mexico.
To underscore his seriousness about the tariffs directive he signed, Mr Trump said, “This is permanent.”