1 week Ago By The Guardian
A senior economic adviser to Donald Trump has said it would take “an extraordinary deal” for any country, including the UK, to improve on the 10% tariff rate the US has imposed almost worldwide, pouring cold water on Downing Street’s hopes for a breakthrough. Trump succumbed to pressure from plunging financial markets on Wednesday and temporarily reduced “retaliatory” tariffs on all countries to 10% – barring Chinese goods , which face a rate of 145%. Related: The big lesson for Europe? Trump backed down under pressure | Alexander Hurst For the UK, this is no change from the levy imposed when Trump announced his “liberation day” agenda , but Keir Starmer’s government still hopes a free trade deal with the US can be reached to mitigate the impact of the tariffs.
The UK also faces a 25% tariff on steel and cars exported to the US. Speaking to CNBC, Kevin Hassett, an economist and adviser to Trump, said any deal that would persuade the president to go below that would need to be “extraordinary”. “I think everybody expects that the 10% baseline tariff is going to be the baseline,” he said.
“It is going to take some kind of extraordinary deal for the president to go below there.” Starmer has said he has still not spoken to Trump since the trade tariffs were introduced, with government sources saying the UK was not given any warning of this week’s changes to the duty. While the UK is pressing for a reduction in tariffs through a trade deal, Downing Street has stressed throughout that the world has changed and the UK must also pursue other avenues for economic growth and agreements with other partners.
On a visit to Doncaster, Starmer made clear the UK could not just “sit back and hope” that the tariffs would not come into force. He said instead the government must “rise to the moment here, recognise where our future lies, renew Britain and deliver security for working people”. Trump has joked at a Republican party event in Washington DC that countries were “kissing my ass” to hold trade deal talks.
Asked if he was comfortable with this language, the prime minister said the US was Britain’s “closest ally” and it was important to maintain a “calm and pragmatic approach” to negotiations. Pressed whether Trump was refusing his calls, Starmer said: “No, not at all. You have to understand with the UK and US, our teams talk all of the time .
.. that is constantly going on.
That is what you would expect of two very close allies.” The president’s surprise announcement of the 90-day pause to hefty tariffs imposed on some countries brought respite to battered stock markets across the world, including London’s FTSE 100. US stocks suffered another day of steep losses on Thursday as Wall Street tried to digest the economic impact of the tariffs.
The S&P 500 blue-chip index dropped 3.5% and the technology-focused Nasdaq Composite fell 4.3% as Trump blamed “transition problems” for the market reaction.
The sell-off deepened after a White House clarification noted that total tariffs on China had been raised by 145% since Trump took office. The negative sentiment carried over to Asia on Friday, where Japan fell hardest as the Nikkei 225 index, which rose by 9% on Wednesday, shed 3.4%.
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