Trump tariffs mark beginning of new world era, warns Downing St

Donald Trump's tariffs signal a new global economic era, Downing Street said yesterday as economists warned the government would probably have to raise taxes in response.

- Kiran Stacey Eleni Courea Heather Stewart

No 10 said the prime minister believed this week's trade announcement by the US president, which has started a global trade war and sent stock markets tumbling, marked a turning point in history.

Starmer is due to speak to European and Commonwealth leaders in a series of calls this weekend before setting out how he intends to respond more fully on Monday.

Senior MPs have called on him not to give too much ground to Washington in trade talks, cautioning him against trying to become "the 51st US state". Starmer will say next week that he wants to cut red tape and remove more planning restrictions as a way to boost growth, but experts say this is unlikely to fill a new budget black hole.

A Downing Street spokesperson said: "The global economic landscape is shifting and we need to shift with it through overhauling our planning system, bringing forward our industrial strategy and cutting excess red tape. We are already embracing that new era."

Ministers are still optimistic they can agree a trade deal with the US that would avoid the worst of the direct impact of the tariffs. Ministers hope to restart negotiations next week.

The broad outlines of a deal have been drawn up and include concessions across a range of areas, including a lower digital services tax on US tech giants and reduced tariffs on some agricultural products.