Shares in carmakers dive by up to 7% as Trump accelerates his trade war

Shares in global carmakers fell sharply yesterday after Donald Trump announced a 25% tariff on vehicle imports in an escalation of his trade wars.

- Julia Kollewe Kiran Stacey

The new levies on cars and light trucks will take effect on 3 April, a day after the US president plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the US trade deficit.

Shares in US carmakers fell on the back of Trump's announcement, with General Motors down by 7.4% and Ford 3.4% lower in early trading.

Asked if Britain would impose its own tariffs against the US in response, the chancellor, Rachel Reeves, said the UK was not immediately planning to do so. "We are not at the moment in a position where we want to do anything to escalate these trade wars," she told Sky News. "Trade wars are no good for anyone."

An escalation of tariffs would be bad for Britain "but it would be bad for the US as well, and that's why we are working intensely these next few days to try to secure a good deal for Britain", Reeves said in a separate BBC interview.

Trump said on Wednesday the tariffs "start off with a 2.5% base, which is what we're at and go to 25%".