Trump’s tariffs are bad news but we are right to play nice

A big trade partner hitting us where it hurts could not come at a worse time for Britain, writes James Moore. But we have faced more unsavoury characters than the new US president

- James Moore

Donald Trump wasn’t kidding about tariffs. The idea that his angry comments about trade – along with his repeated threats to hit friends and rivals alike – were just rhetoric designed to elicit cheers at his rallies has been comprehensively debunked. The hammer has fallen, and looks set to fall again.

This spells danger for the UK. A big and important trade partner hitting us where it hurts could scarcely come at a worse time for a country grappling with a stagnant economy and the looming threat of a fiscal crisis.

Unfortunately, the US president has signed a memo ordering staff to report back on a plan covering “reciprocal trade and tariffs” within 180 days. Howard Lutnick, the Wall Street veteran who is his pick for commerce secretary, said it would be ready by 1 April. The British government will be on tenterhooks until that date, not least because it isn’t just the tariffs and trade policies of other countries that Trump is taking aim at. Our taxes are also in the firing line.

The digital services tax, imposed on Silicon Valley, is one area of contention. Introduced in April 2020, it was designed to address concerns that an international tax system more suited to the 19th century than the 21st was failing to recognise the value being generated for digital companies by UK consumers.