White House has raised threat of levies as a means to bolster US economy, ignoring warnings trade wars could derail it
Donald Trump stood firm against warnings that his threatened trade war risks derailing the US economy, claiming his administration could hit foreign cars with tariffs of around 25% within weeks.
Semiconductor chips and drugs are set to face higher duties, Trump told reporters at a news conference on Tuesday.
Continue reading...End of ‘de minimis’ policy for Chinese goods also expected to hit bigger fashion retailers such as Asos and Boohoo
Many UK-based independent sellers on marketplaces such as eBay and Amazon could suffer a significant hit to US sales from planned changes to import rules under Donald Trump, with experts comparing the impact to a second Brexit.
The new rules, which mean all parcels originating or made in China and being sold into the US must pay import duty – of as much as 15% on fashion items – and an additional 10% tariff, are also expected to impact bigger online clothing retailers such as Asos and Boohoo.
Continue reading...Uncertainty created by tariffs and contempt for rule of law will deter investment, says top economist
Donald Trump’s tariff threats have made the US “a scary place to invest” and may unleash stagflation, the Nobel prize-winning economist Joseph Stiglitz has said.
“It risks the worst of all possible worlds: a kind of stagflation,” Stiglitz said in an interview with the Guardian.
Continue reading...Plan for ‘reasonable’ 2.8% rises may prove insufficient, forcing chancellor to find billions in extra funding
Rachel Reeves has been warned public sector unions will demand higher pay increases to compensate for accelerating inflation, heaping pressure on the chancellor to find billions of pounds in extra funding.
The government made recommendations in December for a 2.8% pay rise for teachers, NHS staff and other public sector workers for the financial year beginning in April, saying it was a “reasonable amount” given forecasts for the economy.
Continue reading...Impending tax rises from autumn budget fuel collapse in sentiment and rising redundancy intentions, surveys show
UK employers are preparing for the biggest redundancy round in a decade amid collapsing business confidence as firms brace for tax increases from April that Rachel Reeves announced in her autumn budget.
In a fresh blow for the chancellor, the Chartered Institute of Personnel and Development (CIPD), which represents human resources professionals, said a survey of 2,000 employers showed redundancy intentions at their highest level in 10 years, barring the Covid pandemic.
Continue reading...As her £9.9bn of headroom evaporates, chancellor will have to raise taxes, cut spending or break ‘iron-clad’ fiscal rules
When Rachel Reeves stood up in the House of Commons on budget day on 30 October as this country’s first woman chancellor, she was brimming with pride: “To girls and young women everywhere, I say: Let there be no ceiling on your ambition, your hopes and your dreams.”
Four months on, however, there are few women or men, young or old, at Westminster, who would envy Reeves’s lot in charge of the country’s finances. The bind she finds herself in is more the stuff of a chancellor’s nightmares than dreams.
Continue reading...The US president announced what he called ‘reciprocal tariffs’ on all other countries on Thursday
The UK government will “wait and see” whether tariffs announced by Donald Trump “actually come to pass”, a senior minister said.
The US president announced what he called “reciprocal tariffs” on all other countries on Thursday evening, claiming it was “fair to all”.
Continue reading...ONS data showing British national output rose in final quarter of 2024 confounds forecasts of 0.1% decline
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Britain’s economy unexpectedly picked up in the final three months of 2024, official figures have shown, easing pressure on the chancellor, Rachel Reeves, after flatlining during the summer.
Figures from the Office for National Statistics show gross domestic product rose by 0.1% in the fourth quarter of 2024 – after zero growth in the previous three months – to beat the forecasts of City economists and the Bank of England for a decline of 0.1%.
Continue reading...While UK may not be in direct line of fire, knock-on effects on global trade has British businesses worried
“We’re vulnerable at the moment,” says Fiona Conor, the managing director of Trust Electric Heating, a Leeds-based radiator manufacturer, who has been considering expanding into the US market.
After a predictably unpredictable start to Donald Trump’s second term as US president, Conor is worried her options could be limited, as businesses across the UK brace for a global trade war.
Continue reading...The president repeatedly claimed he would lower prices during the election campaign, but that’s not an easy task
As tens of millions of Americans prepared to watch the Super Bowl this weekend, Donald Trump sat for the customary pre-game presidential interview.
Trump was elected after pledging to bring down prices fast as much of the country grappled with the cost of living after years of heightened inflation. So when the Fox News anchor asked would families start to feel the impact, the president changed the subject.
Continue reading...Downturn in jobs market will mean workers will be unlikely to be able to bid up their wages, says policymaker
The Bank of England policymaker Catherine Mann has said she backed a half-point cut in UK interest rates last week because she believes the downturn in the jobs market will make the inflation “hump” this year short-lived.
Mann surprised financial markets last week by switching from voting against the Bank’s last cut, in November, to supporting a half-point reduction.
Continue reading...Modified US duties will be enforced ‘without exceptions’, said president, in controversial bid to boost economy
Donald Trump announced 25% tariffs on foreign steel and aluminum on Monday, ramping up his controversial bid to boost the US economy by hiking taxes on imports from overseas.
The modified US duties will be enforced “without exceptions or exemptions”, the president declared, dashing the hopes of countries that hoped to avoid them.
Continue reading...Analysts say measures so far have been less than feared but traders still cautious as uncertainty about US policy ‘has basically exploded’
Asian markets were mixed on Tuesday as traders kept a nervous eye on Donald Trump’s next moves after he signed off on 25% tariffs for steel and aluminium imports, having warned of more measures to come.
The president has lived up to his campaign pledges to resume his hardball trade diplomacy to extract concessions on a range of issues, including commerce, immigration and drug trafficking.
Continue reading...Ex-treasury secretaries caution against administration’s subversion of checks and balances, specifically Musk
A group of five former US treasury secretaries are warning that the Trump administration has put the country’s key payment systems “under siege” and is undermining the checks and balances of the federal government.
The secretaries warned that the administration has compromised roles historically given to nonpartisan career civil servants and have replaced them with “political actors”, according to a New York Times op-ed published on Monday. The secretaries specifically called into question Elon Musk’s so-called “department of government efficiency”, or Doge, and the appointees that Musk has installed within agencies, including the treasury department.
Continue reading...US president accused of ‘shifting goalposts’ by premier of Ontario for adding further tariffs on top of existing metal duties
Donald Trump has said he will announce new 25% tariffs on all steel and aluminum imports into the US on Monday that would affect “everybody’, including its largest trading partners Canada and Mexico, in another major escalation of his trade policy overhaul.
The US president, speaking to reporters on Air Force One on Sunday, also said he would announce reciprocal tariffs – raising US tariff rates to match those of trading partners – on Tuesday or Wednesday, which would take effect “almost immediately”. “And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.
Continue reading...President halts plan to put tariffs on low-value packages but says he will impose duties on more countries next week
Donald Trump halted a key part of his tariff attack on China on Friday, as he threatened to impose new US duties on goods from many more countries next week.
Plans to ensure shipments from China to the US worth less than $800 still face tariffs – removing the longstanding duty-free status of low-cast packages – have been delayed to give more time to federal agencies to prepare for the change.
Continue reading...UK economy expected to grow by just 0.75% this year, in fresh blow to Rachel Reeves’s attempts to raise confidence
Rachel Reeves’s plans for growth suffered a double blow after the Bank of England halved its forecast for the year and warned households would face mounting pressure from rising prices.
In a downbeat assessment as it cut interest rates for a third time in six months, Threadneedle Street warned people would face a fresh squeeze on living standards from rising inflation even as the economy stalled.
Continue reading...Weak jobs market and above-target inflation will dent Reeves’s growth plans and may wipe out fiscal headroom
With the public finances tight and Rachel Reeves having pledged to balance the books, interest rate cuts are one of the few levers that could boost the UK’s economic growth in the short term, and the chancellor will be glad of the Bank of England’s quarter-point reduction on Thursday – and the clear signal that it is now in cutting mode.
Seven of the monetary policy committee’s (MPC) nine members backed the quarter-point drop, taking the Bank’s policy rate to 4.5%, while two wanted to be more “activist”, proposing a half-point cut. The Bank of England’s governor, Andrew Bailey, said the MPC would be “taking a gradual and careful approach to reducing rates further”.
Continue reading...Latest quarter-point reduction comes with warning households face inflation of 3.7% by autumn
The Bank of England has cut interest rates to 4.5%, as it halved its UK growth forecasts for the year and warned households would face renewed pressure from rising prices.
With the government under fire over the sluggish economy, the Bank’s monetary policy committee (MPC) voted by a majority of seven to two to reduce its key base rate, down from 4.75%, to provide some financial relief to borrowers.
Continue reading...European Commission also urges EU lawmakers to phase out exemption on customs duties for parcels under €150
Parcels sent from China by online retailers such as Shein and Temu will face strict new customs controls as part of a crackdown by the European Commission on “dangerous products” flooding the EU market.
Brussels officials also urged EU lawmakers to phase out the exemption on customs duties that is allowed for parcels under €150 (£125), which enables foreign suppliers to sell cheap goods in the bloc without paying the tax.
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