How Donald Trump's Liberation Day tariffs affect the UK (2025)

The tariff on imports from the UK will deal a 'major blow' to small and medium businesses, an influential trade group has warned

Donald Trump slapped a 10 per cent tariff on US imports of UK goods as he set out trade levies hitting countries across the world.

On Wednesday (April 2) the US president said his 'liberation day' announcement was a 'declaration of economic independence', but there are fears about how the new tariffs could impact jobs, particularly in the British car industry.

Donald Trump said he would sign an executive order implementing 'reciprocal tariffs on countries throughout the world'.

Speaking from the White House garden, the President said: “In a few moments I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world. Reciprocal. That means they do it to us and we do it to them. Very simple, can’t get any simpler than that.

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“This is one of the most important days in my opinion in American history. It’s our declaration of economic independence.”

Mr Trump confirmed that from midnight in Washington, 5am Thursday in the UK, a 25 per cent tariff would be imposed on all foreign cars imported to the US – a move which experts fear could cost 25,000 jobs in the British car industry.

And he said tariffs of 10 per cent would apply to other products from the UK – the same level as the global 'baseline' he was setting for countries around the world as part of his measures.

But the tariff on imports from the UK will deal a 'major blow' to small and medium businesses, an influential trade group has warned.

Other blocs with higher tariffs on US goods were hit with tougher import taxes by Mr Trump – for the European Union, which he said would attract a 20 per cent rate.

The president also hit out at 'exorbitant' VAT rates, which he views as a barrier to US firms seeking to sell into markets such as the UK where the taxes apply.

Speaking in the White House rose garden, Mr Trump said: “April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again.”

Announcing that he will impose tariffs of 25% on all foreign-made cars, President Donald Trump said: “I don’t blame these other countries at all. I blame former presidents and past leaders. They let it happen to an extent that nobody can even believe.

The Confederation of British Industry (CBI) has said that UK businesses need a 'measured and proportionate approach' to Donald Trump’s announcement of tariffs.

Rain Newton-Smith, chief executive of the CBI said in a statement: “Business has been clear: there are no winners in a trade war. Today’s announcements are deeply troubling for businesses and will have significant ramifications around the world.

“A cool and calm reaction from the UK Government is the right response: UK firms need a measured and proportionate approach which avoids further escalation. Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices.

“The Government has rightfully tried to negotiate a carveout to any incoming tariffs through a bilateral economic deal. As they seek to grow the economy, negotiating stronger trading relationships with all like-minded partners will be foundational to any success.

“The UK must use this unpredictable period to double down on its commitment to free, fair and open trade. Doing so will provide businesses with the confidence needed to kickstart growth, foster innovation, and boost productivity.”

Donald Trump’s 10 per cent tariff on imports from the UK will deal a 'major blow' to small and medium businesses, an influential trade group has warned. Currently, 59 per cent of small UK exporters sell into the US market, the Federation of Small Businesses (FSB) said.

“Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat,” Tina McKenzie, the FSB’s policy chair said.

“The fallout will stifle growth, hurt opportunities, and put a serious dent in the global economy. The UK Government should now be ready to provide emergency assistance to any SMEs at risk of collapse.”