President Donald Trump warned the UK was “out of line” on trade with the US as he vowed to implement tariffs on the European Union.
The US president told reporters overnight that import fees on EU goods would “definitely happen”, but he stopped short of announcing a timeline.
He had previously complained about the country’s large trade deficit with the bloc, claiming European countries should buy more American cars and food and agricultural products.
He took a softer stance on UK trade, saying that despite Britain being “out of line” when it came to trade with the US, he was confident the situation “can be worked out” without tariffs as he hinted at a potential deal.
“We’ll see what happens”, he added, referring to his positive relationship with UK prime minister Keir Starmer.
“The UK is out of line but I’m sure that one, I think that one can be worked out,” he said. “Well prime minister Starmer’s been very nice, we’ve had a couple of meetings, we’ve had numerous phone calls, we’re getting along very well, we’ll see whether or not we can balance out our budget.”
Both Chancellor Rachel Reeves and business and trade secretary Jonathan Reynolds have previously pledged to work with the US to avoid tariffs.
Trump’s comments came as Canada and Mexico announced they would retaliate against 25% tariffs on their exports starting this Tuesday. China is also now facing 10% tariffs on some goods from 4 February.
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Many stores in Canada are now showing signs explaining certain US products including booze are no longer stocked and encouraging shoppers to buy domestic goods.
Meanwhile, the European Commission has warned the US that it would not hold back on retaliatory levies should Trump launch them on EU goods.
Shares on Asian and European markets tumbled in early trade on Monday after Trump’s comments, with companies fearing the start of a global trade war.
The London FTSE 100 share index fell 1.2%, while the main share indexes in both France and Germany were down by about 2%. European car manufacturers saw the biggest falls, as the sector is set to be one of the most affected by US tariffs.
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