Trump tariffs live: Starmer insists UK ‘prepared for all eventualities’ as fears over trade war grow

Italy’s Prime Minister Giorgia Meloni and its top business lobby warned today that looming US tariffs would have a major impact on the country’s exports and already struggling economy.

“It is clear that the introduction of new tariffs would have heavy repercussions for Italian producers”, Meloni said while hosting a prize-giving ceremony for Italian cuisine in Rome.

Meloni added that she did not rule out “adequate responses” to protect the exports of the euro zone’s third largest economy, though she did not elaborate.

Italy posted a trade surplus with the US of €39billion ($42.14 billion) in 2024, the third largest in the 20-nation euro area, Eurostat data shows.

Earlier on Wednesday, business association Confindustria said Italy’s economy would grow by 0.6 per cent this year, half the government’s official target and down from a 0.9 per cent forecast made by the group in October.

The economy expanded by a modest 0.7 per cent in both 2024 and 2023.

It eked out 0.1 per cent growth in the fourth quarter of 2024 from the previous three months, after stagnating in the third quarter. Most analysts expect no significant pick-up in the near term.

Confindustria said that while its forecasts incorporated already-announced US tariffs on steel and aluminium and what it called “record levels of uncertainty” on trade policy, they did not factor in the effects of an escalating trade war.

In a worst case scenario, with permanent 25 per cent US tariffs on all imports, rising to 60 per cent for China, and retaliatory measures against U.S. exports, Italy’s growth would fall to around 0.2 per cent this year, it said.

Sir Keir Starmer has reportedly offered big US tech companies a major tax break in a last-ditch bid to dodge Donald Trump’s damaging tariffs.

The prime minister is prepared to lower the rate of the government’s digital services tax (DST) in a bid to win concessions from the president as a global trade war looms, it has emerged.

There is reportedly a deal on the table ready to be signed, covering areas such as artificial intelligence and other future technologies. But The Guardian on Wednesday also reported the UK has offered significant changes to the DST. The move would reportedly see Britain lower the headline rate of the tax, in a major boost to major American firms such as Amazon, Facebook owner Meta and Google owner Alphabet, while at the same time applying the levy to companies from other countries.

Our political correspondent Archie Mitchell has more details:

The UK is not setting out a timeframe to seal a deal with the US that it hopes will reverse Donald Trump’s looming tariffs, Downing Street has said.

Asked about a deadline to reach an economic deal, the prime minister’s official spokesperson said: “We’re not putting a time frame on that.”

He said that business and industry groups have asked the government to “prioritise dialogue” with the US and not take a “kneejerk” reaction.

Asked about the risk of cheap goods flooding into the UK market amid a trade war and how to protect domestic industries, he pointed to the “robust trade remedies regime” that already has measures in place for the steel sector.

The government will look closely at the impact on Northern Ireland of any retaliatory tariffs imposed by the EU, the spokesperson said.

Sir Keir Starmer has said the government is “looking carefully at the details of any retaliatory tariffs announced by the EU” and how Northern Ireland could be impacted, if the US goes ahead with its plans to introduce tariffs.

DUP leader Gavin Robinson told the Commons that “most won’t have considered that in acting in the national interest, what occurs in Northern Ireland is no longer solely in his [Sir Keir’s] control”.

He asked: “Will he indicate that he is prepared to take steps to either exempt Northern Ireland from EU action, or take retaliatory action if they do not?”

The prime minister began his reply by saying “we need to be calm and pragmatic”, adding: “I think that’s what workers and businesses in Northern Ireland would want to see from this government at a time like this.

“We are, as he would expect, looking carefully at the details of any retaliatory tariffs announced by the EU if they are and what impact they might have on businesses.

“As he knows, where goods do not enter the EU, then businesses can claim a full reimbursement of any EU duties paid, but I reassure him the interests of Northern Ireland are at the forefront of our decisions.”

Sir Keir said Business Secretary Jonathan Reynolds had spoken with the Northern Ireland Executive on Wednesday morning.

As the world economy braces for Donald Trump’s unveiling of a swathe of tariffs, some country leaders will be fearing the worst after Washington singled out a “dirty 15” list of nations.

Although not naming the countries, treasury secretary Scott Bessent said the group of nations traded heavily with the U.S. and had high tariffs on U.S. goods, plus held non-tariff barriers such as domestic-content production rules.

My colleague Alex Croft has more details in this report:

Donald Trump’s tariffs will push up prices for US shoppers because retailers are operating on “wafer-thin margins”, the chief executive of the luxury grocer Fortnum & Mason has warned.

Tom Athron told The Telegraph: “Ultimately it will be the consumer who pays. No one wins in a trade war. All that happens is that prices go up and productivity falls. I think it’s really disappointing that we find ourselves in this situation.”

Mr Athron said it was “too early to say” what the specific impact would be on Fortnum & Mason.

In his latest column, our chief business commentator James Moore writes:

Donald Trump is characterising it as “Liberation Day”. The rest of the world is scratching its collective head and wondering how the most destructive trade policy the US has ever embarked on will end – and how much damage it will do to the global economy.

It’s still not clear how this “liberation” will work or what form it will take. Will the tariffs be Trump’s favoured 25 per cent? Will they land on top of the levies already imposed? How will those charged with collecting at America’s ports and border crossings cope? Who knows or dares to ask?

The potential chaos will be mitigated at first because of the protective measures taken by those affected. While some – especially on Wall Street – viewed his victory with rose-tinted spectacles, importers in the US were much more sanguine and took steps to prepare for the worst.

They stepped on the gas. The net result of this can be seen in the numbers. Trump’s attempt to reduce the US trade deficit resulted in it jumping to a record $131.4bn in January 2025, up from a shortfall of $98.1bn in December 2024. The irony could hardly be more painful. Of course, that will unwind over time, and Trump will doubtless use the fall in the deficit when it does to claim the policy is working.

But his trade H-bomb will result in fallout over the US as much as it does over the rest of the world and not just by requiring American consumers to pay more for the goods they buy or hiking the costs of US businesses which import raw materials from overseas.