UK threatens to retaliate to Trump’s tariffs and draws up 400-page hitlist of US goods to tax

The government draws up a 417-page list of products to target with import taxes in retaliation against Donald Trump’s tariffs on. Sir Keir Starmer’s government has threatened to hit the US with retaliatory tariffs if the UK cannot strike a trade deal with Donald Trump.

Business secretary Jonathan Reynolds said ministers will look at “possible retaliatory action” in response to 10 per cent levies on British goods entering the US, as officials work through 417 pages of products they could target in a list that includes everything from bourbon whiskey to motorbikes.

It comes as the prime minister was unable to rule out another tax raid or more cuts to benefits in a bid to balance the government books. The Office for Budget Responsibility (OBR) had already warned that the Trump tariffs would wipe out the fiscal headroom chancellor Rachel Reeves clawed back with her spring statement last week.

As businesses began to assess the economic turmoil unleashed by the US president, the Federation of Small Businesses (FSB) revealed that around a third (32 per cent) of small and medium-sized firms have been hit by the tariffs. Meanwhile, international markets were in turmoil, led by the Dow Jones losing more than 1,500 points on the day’s trading. The US dollar hit its lowest point for six months as the EU warned that Mr Trump had struck “a major blow” against the world economy.

With a full-blown trade war looming, Ursula von der Leyen, president of the European Commission, said on Thursday the bloc was “prepared to respond” to Mr Trump’s tariffs, while French president Emmanuel Macron condemned them as “brutal”.

The UK prime minister again appealed for calm but acknowledged at the launch of his local government campaign in Chesterfield that the world is at the beginning of a “new economic era”. Sir Keir said “we have to act and lead differently”, describing the response to President Trump’s tariffs as “not just a short-term tactical exercise”. “It is the beginning of a new era, we need to understand that, just as we have for defence and security, we have to understand the changing world when it comes to trade and the economy,” he added.

Starmer refuses to rule out further benefit cuts after Trump's tariffs

Asked by The Independent whether he could rule out further benefit cuts to fill any hole in the public finances left by Mr Trump’s trade war, the prime minister said the Budget was a long way away. He said: “There’s a lot of water that will have to go under the bridge before then. Obviously, my job, our job, the government’s job, is to take the steps necessary in our national interest, which is why we’re focusing on progressing the deal that we’ve been discussing with the US, making sure that we are in a position to take other measures, should they be necessary, but at the same time continuing and turbocharging the work we’re doing on growth and reform and changing our economy. “I’m not going to get into what may or may not happen in six months’ time.”

Economists and businesses warned of a “seismic change” to world trade since Mr Trump unleashed his tariffs on Wednesday (2 April ’25) night.