US president Donald Trump said on Sunday that although the UK was “out of line” when it came to trade he thought it may be able to avoid tariffs. “I think that one can be worked out,” he said.
Mr Trump imposed sweeping tariffs of 25 per cent on Mexico and Canada and 10 per cent on China over the weekend and said tariffs would “definitely happen” with the European Union, sparking fears of a trade war that would derail economic growth and hike consumer costs.
Mr Trump said he would talk on Monday with the leaders of Canada and Mexico, which have announced retaliatory tariffs of their own, but downplayed expectations that they would change his mind.
“I don’t expect anything dramatic,” Mr Trump told reporters as he returned to Washington from his Mar-a-Lago estate in Florida. “They owe us a lot of money, and I’m sure they’re going to pay.”
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Economists said the Republican president’s plan to impose tariffs on Canada, Mexico and China – the US’s three largest trading partners – will slow global growth and drive prices higher for Americans.
Mr Trump says they are needed to curb immigration and narcotics trafficking and spur domestic industries.
“We may have short term some little pain, and people understand that. But long term, the United States has been ripped off by virtually every country in the world,” he said.
In response to Mr Trump’s move, Canadian prime minister Justin Trudeau said his government would place 25 per cent counter-tariffs on $107 billion (€103 billion) worth of American-made products.
Mexico’s president, Claudia Sheinbaum, said she instructed her minister for economy to kick off a response plan that includes retaliatory levies, while China vowed “countermeasures to defend its rights and interests”.
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Asked about the UK and whether it would face tariffs next, Mr Trump told reporters: “We’ll see how things work out. It might happen with them, but it will definitely happen with the European Union, I can tell you that.
“The UK is way out of line. We’ll see ... but the European Union is really out of line. The UK is out of line, but I think that one can be worked out. But the European Union is an atrocity, what they’ve done.”
He said the UK’s prime minister Keir Starmer had “been very nice”.
“We’ve had a couple of meetings, we’ve had numerous phone calls. We’re getting along very well. We’ll see whether or not we can balance out our budget,” Mr Trump said.
A UK government spokesperson said the US was an indispensable ally and close trading partner.
“We have a fair and balanced trading relationship which benefits both sides of the Atlantic,” the spokesperson said.
“We look forward to working closely with president [Donald] Trump to continue to build on UK-US trading relations for our economy, businesses and the British people.”
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Mr Starmer and his ministers have praised Mr Trump since he was elected, stressing how much the UK imports from the US and hoping to avoid tariffs at a time when Britain’s economy is already struggling to grow.
Due to methodological differences between their national statistics agencies, the UK and the US both report trade surpluses with each other in goods.
According to British data, the UK had a trade in goods surplus of £1.9 billion (€2.2 billion) with the US in the year to the end of the third quarter in 2024.
In the same period total trade between the two countries was worth £294 billion, making the US the UK’s biggest trading partner as a single country, although the EU is bigger as a bloc.
But less than one third of its trade is in goods, which could face U.S. tariffs, with the rest made up of services.
Mr Starmer told reporters at the weekend that in his early discussions with Mr Trump the two men had focused on building on strong trading relations.
German chancellor Olaf Scholz said on Monday that the EU is strong enough to react to any tariffs imposed by the US but the goal should be co-operation between the trade partners.
“It’s clear that as a strong economic area we can shape our own future and react to tariff policies ... But the perspective and the goal should be that things result in co-operation,” Mr Scholz said in advance of an informal EU leaders meeting in Brussels.
Following Mr Trump’s moves on tariffs, stocks tumbled across the UK and Europe.
The Cac 40 in France and Germany’s Dax both opened around 2 per cent lower in Monday morning trading, before paring back falls to stand around 1.6 per cent lower.
London’s FTSE 100 index fell sharply as Mr Trump claimed the UK is “out of line”, down 1.2 per cent or 105.8 points down at 8568.2.
Meanwhile, shares in some of the biggest European carmakers plunged. Stellantis and Volkswagen, which have major operations in Mexico and are particularly vulnerable to tariffs, were down 6.8 per cent and 5.6 per cent respectively.
Volvo Cars was down 6.5 per cent while Mercedes Benz, BMW and Porsche lost between 3.6 per cent and 4.3 per cent.
A European Commission spokesperson said the EU “would respond firmly to any trading partner that unfairly or arbitrarily imposes tariffs on EU goods”.
Europe’s biggest carmaker, Volkswagen, said it was counting on talks to avoid trade conflict.- Agencies
