Donald Trump’s 10% tariff on all imports from many countries, including the UK, has come into force after 48 hours of turmoil.
US customs agents began collecting the unilateral tariff at US seaports, airports and customs warehouses at 12.01am ET (0401 GMT), and higher levies on goods from 57 larger trading partners are due to start next week – including the EU, which will be hit with a 20% rate.
The UK prime minister, Keir Starmer, is expected to spend the weekend speaking to foreign leaders about the tariffs, after calls with the Australian prime minister, Anthony Albanese, and Italian prime minster, Giorgia Meloni, on Friday in which the leaders agreed that an “all-out trade war would be extremely damaging”.
Starmer had “been clear the UK’s response will be guided by the national interest” and officials would “calmly continue with our preparatory work, rather than rush to retaliate”, a No 10 spokesperson said.
Up until now, ministers have avoided criticism of Trump as they seek to secure a trade agreement with the US – hoping for some exemption from the tariffs. However, the government has drawn up a list of products that could be hit in retaliation, and is consulting with businesses on how any countermeasures could affect them.
Ralph Goodale, the high commissioner for Canada in the UK, told the BBC’s Radio 4 Today programme the US needed to “feel the pain” and Canada would stand firm.
He said: “The action taken by the US government is completely illogical. It will damage the United States itself. It will raise costs in the United States. It will eliminate jobs in the United States, it will reduce growth in the United States and we have to make it abundantly clear not just that that is going to happen rhetorically, but the US has to feel the pain because ultimately it will be Americans who will persuade their government to stop this foolishness.”
Trump’s announcement of the tariffs on Wednesday shook global stock markets to their core, wiping out $5tn in stock market value for S&P 500 companies by Friday’s close, a record two-day decline. The prices of oil and commodities plunged, as investors fled to the safety of government bonds.
“This is the single biggest trade action of our lifetime,” said Kelly Ann Shaw, a trade lawyer at Hogan Lovells and former White House trade adviser during Trump’s first term.
While speaking at a Brookings Institution event on Thursday, Shaw said she expected that over time the tariffs would evolve as countries started negotiating lower rates for themselves, but called the change “huge”.
Shaw said: “This is a pretty seismic and significant shift in the way that we trade with every country on Earth.”
Australia, the UK, Colombia, Argentina, Egypt and Saudi Arabia are among countries initially hit with the 10% tariff. A US Customs and Border Protection bulletin to shippers indicates no grace period for cargoes on the water at midnight on Saturday.
However, a bulletin from the agency did provide a 51-day grace period for cargoes loaded on to vessels or planes and in transit to the US before 12.01am ET Saturday. These cargoes need to arrive in the US by 12.01am ET on 27 May to avoid the 10% duty.
At 12.01 ET on Wednesday, Trump’s higher “reciprocal” tariff rates of 11% to 50% are due to take effect. EU imports will face a 20% tariff, while Chinese goods will be hit with a 34% tariff, bringing Trump’s total new levies on China to 54%.
Canada and Mexico were exempt from Trump’s latest duties because they are still subject to a 25% tariff related to the US fentanyl crisis for goods that do not comply with the US-Mexico-Canada rules of origin.
Reuters contributed to this report
