Fuel prices, loan rates & pension fears – experts reveal what Trump’s latest tariff blitz means for your money
BRITAIN is bracing for chaos as Donald Trump’s latest round of sweeping trade tariffs comes into force today.
The US President’s brutal levies were introduced at midnight, seeing some of America’s main trading partners hit with further dramatic hikes on import duties.
This includes a 10 percent import tax on nearly all UK products entering the US, as well as the previously announced 25 percent levies on aluminium, steel and cars.
Fuel prices, mortgages, pension funds and cost of goods are all set to be impacted in Britain amid fears of a recession.
Republican Trump claims the controversial measures are necessary to restore his country’s economy and ensure national security.
It will push the US’ overall tariff rate to the highest in more than a century.
In response, Chancellor Rachel Reeves insisted Britain is “accelerating trade deals with the rest of the world”.
Here’s some of the ways the trade war will affect you.
FUEL PRICES
With wholesale prices tumbling, the RAC predicts petrol and diesel will fall by up to 6p a litre within a couple of weeks.
The bad news is this is only because traders think a recession will affect demand.
The price of Brent Crude oil fell to its lowest level since April 2021 on Monday, falling to 63.49 dollars a barrel.
Last month, the Competition and Markets Authority (CMA) said it was “concerned about the intensity” of competition between fuel retailers which was seeing drivers hit by fuel price margins which “remain high compared to historic levels”.
MORTGAGES
Brokers forecast a Bank of England rate cut from the current 4.5 per cent in May.
Loan rates could fall as low as 3.79 per cent, saving homebuyers thousands.
High street banks are already gearing up for a price war, with TSB reducing two-year fixed mortgage rates by up to 0.25 per cent yesterday.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said the Bank of England, and other countries’ central banks, “will be really looking to cut interest rates as much as possible in order to support growth”.
“And of course mortgage companies start to price that in right away and we’ve already seen mortgage rates start to fall and we should see plenty of that in the coming days,” she added.
PENSION FUNDS
Those with defined benefit pension schemes ought not to worry as they are managed conservatively.
Others should ensure pensions are invested in a mix of assets, including bonds — and not stuffed with plunging US stocks.
BBC ‘s business editor Simon Jack said: “Pensions are exposed right now, but pension investing is a long term game.
“The warning sign flashing here is not the value of your pension pot – it is what is going to happen to the economies in which we all live and work.
“A lot of people are saying the chance of recession in both the US, UK – and even globally – have gone up a notch, which has implications for things like jobs and wages.”
COST OF GOODS
Some imports could become cheaper as companies in countries hammered by Trump give the US a miss.
But that will hurt British manufacturers if we are flooded with cut-price products.
Kitchenware, foil and drinks sold in the UK could become more expensive as a result of Trump’s tariffs.
Companies who manufacture aluminium-based goods and ship them to the US could be forced to pass on the increased costs to customers in the UK.
This could lead to higher prices at home.
PM 'won't knee-jerk'
THE UK should not “jump in with both feet” to retaliate against Donald Trump’s trade tariffs, Sir Keir Starmer has said.
And the PM told a group of senior MPs that he was not open to “trading away” the NHS as part of an economic agreement with the US.
Sir Keir was also “very clear” that a digital tax on big tech firms should stay in place, despite pressure from America to bin it.
The PM told the MPs: “Obviously we have to keep our options on the table and do the preparatory work for retaliation if necessary.
“But I think that trying to negotiate an arrangement which mitigates the tariffs is better.”
Trump is pummeling China with a 104 percent tariff, sparking an all-out trade war with the US’s rival economic superpower.
The confirmation of the extra levy led to Wall Street giving up the gains it had made on another tumultuous day for shellshocked traders.
Stock markets, including London’s FTSE 100, had started to recover in the hope a deal could be reached to ease some of Trump’s tariffs.
‘ACCELERATING TRADE DEALS’
Chancellor and Business Secretary Reeves will later meet India’s finance minister for talks aimed at negotiating a deal with the country as the Chancellor said she wanted to create “the best possible conditions” for British business in a “changing world”.
Prime Minister Sir Keir Starmer on Tuesday reiterated his call for a calm approach to the changed US trade policy as a sense of optimism returned to the financial markets after several days of heavy losses.
Starmer had declined to officially back a “buy British” campaign in response to Trump’s tariffs proposed by the Lib Dems.
Britain faces the lowest 10% “baseline” tariff rate and has resisted imposing immediate retaliatory action, unlike the European Union which is impacted by a 20% import tax.
The PM’s spokesman said the UK is “an open-trading nation” and Downing Street was “not going to tell people where they buy their stuff”.
However, ministers are reportedly reviewing procurement rules to give an advantage to British firms bidding for government contracts, according to the BBC.
Number 10 has repeatedly stressed it will not rush into retaliatory measures despite concern of business owners.
Starmer is reported to have told senior MPs the UK shouldn’t “jump in with both feet” and will retaliate only “if necessary”.
Ministers still hope an economic agreement with Washington can be reached to soften the blow of the levy which strikes UK goods, along with a 25% import tax on cars and separate ones for steel and aluminium.
But the Government will also seek to strengthen trade ties with other countries, including by trying to rebuild ties with the European Union.
Musk's 'moron' blast at adviser
By Noa Hoffman
ELON Musk launched a blistering attack on White House trade adviser Peter Navarro yesterday, branding him a “moron” and “Peter Retardo”.
The billionaire Tesla boss also accused his fellow Donald Trump ally of spreading “demonstrably false” claims about his electric car empire.
It came after Mr Navarro, on Monday, told US network CNBC that Mr Musk “isn’t a car manufacturer — he’s a car assembler”.
He argued the tech mogul’s criticism of US tariffs stemmed from his reliance on supply chains in China and Japan.
But the Department of Government Efficiency chief hit back, saying: “Navarro is truly a moron. What he says here is demonstrably false.
“Tesla builds the most American-made cars. Navarro is dumber than a sack of bricks.”
The spat has exposed simmering tensions among the US President’s inner circle, as divisions grow over his hardline tariff policies.
But White House press secretary Karoline Leavitt shrugged off the name-calling last night, saying: “Boys will be boys.”
The Chancellor said: “In a changing world, this Government is accelerating trade deals with the rest of the world to back British business and provide the security working people deserve.
“We are going further, faster to create the best possible conditions for British business by working to reduce barriers to trade.”
Discussions will focus on areas such as defence and jobs creation, investment and trade opportunities, she said.
The UK has been through more than a dozen rounds of talks since 2022 over a potential agreement with India, which is forecast to become the world’s largest economy.
Key sticking points were said to include visa rules for Indian students and professionals, as well as access for British service firms.
Speaking to MPs on Parliament’s Liaison Committee on Tuesday, the Prime Minister reiterated his opposition to immediate countermeasures in response to Mr Trump’s tariffs but said all options remained on the table.
“My instinct is that we shouldn’t jump in with both feet to retaliate. So in that sense, I’m not changing my plans,” he said.
“Obviously we have to keep our options on the table and do the preparatory work for retaliation if necessary. But I think that trying to negotiate an arrangement which mitigates the tariffs is better.”
But Sir Keir indicated he wants to protect the NHS from US commercial interests, and was also “very clear” that a digital tax on big tech firms should remain in place, despite reports the levy could be abolished as part of a deal.
“I have been very protective of the approach we take to the NHS in any dealings with any other country because it is our greatest asset, and we are not trading it away,” he said.
The tariffs are not a “temporary passing phase” but part of a “changing world order”, the Prime Minister added.
A 10% import tax on goods coming into America from around the world kicked in on Saturday morning, while a 25% levy on foreign cars had come into force on Thursday.
The FTSE 100 closed yesterday up by 2.71 per cent, or 208.45 to 7,910.53, as big banks such as Barclays bounced back.
Traders noted that the rebound was not enough to make up the 11 per cent plunge since Liberation Day which had wiped off £250billion from London listed companies.
Dan Coatsworth, investment analyst at AJ Bell, called it a “magic bounce-back day” that marked the end of a market bloodbath but there was already caution about how long it would last.
Trump has refused to water down his worldwide tariff blizzard despite warnings from top business execs.
Most nations will today be slapped with higher levies.
The UK, already hit with a 10 percent tariff, has been spared additional charges.
ARE WE HEADING FOR RECESSION?
Stock markets can often seem separate to everyday life and the real economy.
However, the flashing red lights of tumbling share prices are a warning about investors’ views on the economy.
They have tanked because traders are betting Trump’s trade wars will damage companies’ profits and make them unlikely to invest, hire or expand.
The knock-on will be job cuts, which will lead to weakened consumer confidence and depress spending.
Larry Fink, boss of Blackrock, the world’s biggest asset manager, suggested the US may already be in recession and said the economy was “weakening”.
Analysts at Wall Street bank JP Morgan have estimated a 60 per cent chance of a global downturn while rival bank Goldman Sachs has started a “countdown to recession” and given it a 45 per cent probability.
Shares in banks, including HSBC and Barclays, have plunged by levels not seen since the financial crisis.
Similarly, commodity prices including copper and oil have slumped by 15 per cent as investors bet on lower global demand in the event of a recession.