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The UK’s FTSE 100 suffered its worst day since the start of the pandemic as Sir Keir Starmer agreed that “like-minded countries must maintain strong relationships” in the wake of Donald Trump’s tariffs.
Trading across the world has been hammered in the aftermath of the US president unveiling his full range of import taxes on countries around the world.
The Prime Minister spoke to the leaders of Australia and Italy on Friday – the first in a series of calls expected with world leaders over the weekend – as nations reel from the economic hit.
London’s top stock market index shed 419.75 points, or 4.95%, to close at 8,054.98 on Friday, the biggest single-day decline since March 2020 when the index lost more than 600 points in one day.
From Saturday, UK goods imported into the US will be subject to a 10% import tax, and the car industry has already been hit with a 25% levy which came into effect in the early hours of Thursday morning.
Downing Street has said that Sir Keir, Anthony Albanese and Giorgia Meloni “all agreed that an all-out trade war would be extremely damaging”.
Issuing a readout of the separate discussions on Friday, a Downing Street spokesperson said the PM “has been clear the UK’s response will be guided by the national interest” and officials will “calmly continue with our preparatory work, rather than rush to retaliate”.
“He discussed this approach with both leaders, acknowledging that while the global economic landscape has shifted this week, it has been clear for a long time that like-minded countries must maintain strong relationships and dialogue to ensure our mutual security and maintain economic stability,” the spokesperson added.
“They all agreed that an all-out trade war would be extremely damaging and is in nobody’s interests, while agreeing to keep in close contact in the coming days.”
It is expected that Sir Keir will take further calls with counterparts over the weekend.
All but one stock on the FTSE 100 fell on Friday, with Rolls-Royce, banks and miners among those to suffer the sharpest losses.
Mr Trump claimed on Thursday that Sir Keir was “very happy” with Britain’s treatment over tariffs, telling reporters on board Air Force One that the pair “have a very good dialogue”.
Number 10 contradicted the characterisation, and said the UK is “disappointed” by the President’s decision.
Asked on Friday whether Mr Trump’s characterisation was accurate, a Downing Street spokesman said: “We’re disappointed by the tariffs that have been brought in.
“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally, but both the Prime Minister and the Business Secretary have been very clear over the last 24 hours that we will continue to act in the best interests of the UK, and we’re prepared to do so.”