Trump tariffs latest: Global cost of trade war revealed as Lammy says UK ‘preparing for the worst’

It is “excellent” if Sir Keir Starmer does not want to impose retaliatory tariffs on the United States, Kemi Badenoch has said.

Asked by Sky News about the prime minister’s approach, the Tory leader said: “On tariffs, if the prime minister does not want to put retaliatory tariffs on, I think that is excellent – that is the right thing to do.

“Where he does the right thing, we will agree. But where he does the wrong thing, we will disagree and provide constructive criticism. That is my job and that is what I am doing.”

Asked how she can turn around the Tories’ reputation on the economy, Conservative leader Kemi Badenoch told Sky News: “Our reputation was not built in the last few years. It was built over many decades, I would say centuries.

“The Conservative Party is the party of business. You look at our shadow cabinet – many of us have started listed businesses, we’ve worked in the private sector. You cannot compare that with Labour, where most of them have never run a business and not even worked in the private sector.

“So we get it. And, at the end of the day, Rishi Sunak was the last prime minister and he left Keir Starmer an economy that was the fastest-growing in the G7. All of that is gone.

“We’re not saying that there weren’t difficult times under the Conservatives – the debt burden you are talking about has happened because of Covid. Everybody remembers a pandemic that, for nearly two years, locked us up at home. That needed to be paid for.

“But now, when the green shoots were coming through, Labour has done something that is really destructive, and we cannot run away from that.

“They need to face up to what they are doing. They’re making life harder for everyone else. They’re making life harder and more expensive – and that needs to be fixed.”

As the world economy braces for Donald Trump’s unveiling of a swathe of tariffs, some country leaders will be fearing the worst after Washington singled out a “dirty 15” list of nations.

Although not naming the countries, treasury secretary Scott Bessent said the group of nations traded heavily with the US and had high tariffs on US goods, plus held non-tariff barriers such as domestic-content production rules.

Coining the term “dirty 15”, Bessent was referring to 15 per cent of countries that account for the bulk of U.S. trading volume – a list of nations economists expect could be hit by Trump’s tariffs.

My colleague Alex Croft reports:

US stocks have opened with the major indices in the red on Tuesday, ahead of Donald Trump confirming his tariffs.

A couple of hours into trading, the S&P 500 is down 0.2 per cent, the DOW is down 0.5 per cent and the Russell 2000 – an index of smaller-cap businesses – is down just over 1.0 per cent.

The Nasdaq is slightly in the green though, 0.1 per cent, with those among the individual gainers Stateside including Tesla (4.7 per cent up), Alphabet (1.5), Airbus (1.3) and General Electric (1.1).

Sir Keir Starmer’s government should “stop cowering in the corner” and hoping the “bully” Donald Trump “won’t hurt us if we give him what he wants”, a Liberal Democrat MP has said.

Anna Sabine told BBC Politics Live: “I think we should stop cowering in the corner and hoping that if Donald Trump’s behaving like a bully he just won’t hurt us if we give him what he wants, which seems to be the current approach.

“I think we need to stand up to Trump. I think we should have prepared retaliatory tariffs. I think we should be looking at imposing tariffs on things like Tesla to hit people like Elon Musk where it hurts.

“And I think fundamentally we need to be pushing back hard, not coming up with a deal that potentially … reduces digital services tax, so kind of caves into them – goodness knows what else might be in a deal with America.”

Ms Sabine added: “This is just the wrong way of dealing with a bully. You don’t deal with a bully by just giving everything they want, particularly when Trump’s historically very unreliable, and we could do one deal one day and he changes his mind the next.”

While Sir Keir Starmer may have failed to avert looming US tariffs hitting the UK, there was better news for the UK government as No 10 announced that Donald Trump has formally signed off Keir Starmer’s deal to hand the Chagos islands over to Mauritius.

The agreement is now being “finalised” between the UK and Mauritius, Downing Street said.

Kate Devlin and David Maddox have more details in this report:

Asked if he had been “played” by Donald Trump as it appeared that efforts by Sir Keir to build a good relationship had failed to protect the UK from tariffs, the prime minister told Sky News: “The US is our closest ally.

“Our defence, our security, our intelligence are bound up in a way that no two other countries are.

“So it’s obviously in our national interest to have a close working relationship with the US, which we’ve had for decades, and I want to ensure we have for decades to come.”

Donald Trump’s tariffs will have an impact on the UK economy, chancellor Rachel Reeves has told her fellow Cabinet ministers.

Ms Reeves told this morning’s Cabinet meeting that “global tariffs will have an impact on the UK as an open trading economy”, but said that “securing a deal could mitigate some of those effects”.

The Conservatives’ have drawn mockery after Daily Mail’s political editor compared the backdrop used for Kemi Badenoch’s speech to an abandoned mattress.

Sharing the image, Labour joked that “the DFS sale starts earlier every year”, while the Lib Dems wrote: “We thought the Tories were against fly tipping?”

Attending the press conference, The Independent’s political correspondent Archie Mitchell wrote that the event felt like “a sign of how badly the party is struggling”, with the party’s lack of funds having “long been a talking point in Tory circles, with swathes of head office staff being made redundant to shore up the party’s finances”.

Noting that the venue at Tory HQ felt “more like a classroom than a venue for a major political party’s conference”, he wrote: “Not only could they not rent out a suitable venue to host journalists, they could not get a usually friendly think tank or donor to put them up in a more appropriate spot.”