World leaders and governments have begun reacting to Donald Trump’s sweeping tariffs.
The president imposed a 10% baseline tariff on all imports – but many of America’s biggest trading partners have been hit by a far higher rate.
Speaking at an event he called “Make America Wealthy Again”, Mr Trumpcriticised foreign “cheaters” and held a chart detailing who would be paying what.
Here is some of the latest reaction.
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6:39
Trump’s tariffs explained
China, facing a 34% tax, said it would “resolutely” hit back and “take countermeasures to safeguard its own rights and interests”.
“China urges the United States to immediately cancel its unilateral tariff measures and properly resolve differences with its trading partners through equal dialogue,” said the commerce ministry.
European Commission president Ursula von der Leyen said the tariffs would have “dire consequences” for millions of people around the world.
“We [the EU] are already finalising the first package of countermeasures in response to tariffs on steel,” said Von der Leyen.
“We’re now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.”
Irish Prime Minister Micheal Martin added: “We see no justification for this.
“More than €4.2bn worth of goods and services are traded between the EU and the US daily… Tariffs drive inflation, hurt people on both sides of the Atlantic, and put jobs at risk”.
Image: Donald Trump holding the signed executive order. Pic: Reuters
Japan‘s trade minister, Yoji Muto, called the tariffs “extremely regrettable” and said all options were open.
Asked if Japan would retaliate to the 24% tariff imposed, he added: “We need to decide what is best for Japan, and most effective, in a careful but bold and speedy manner.”
There will be a response from the European Union – the question is how soon, and how tough.
A symbolic reprisal is one choice – putting tariffs on classic American products such as Harley-Davidson motorbikes or bottles of bourbon.
That won’t damage the European economy, but it won’t make much of a difference, either.
There’s a reluctance to slap wide-ranging, indiscriminate tariffs simply because that would increase costs for many European manufacturers.
So something more targeted may look appealing and that could mean going after the tech giants – Facebook, Apple, Google, Amazon, for example.
Companies who have already had rows with EU regulators and are seen as being, to varying extents, close to the White House.
If Europe could specifically target Tesla, it probably would.
There are also those suggesting the EU should hold fire for the moment, confident that Trump’s tariffs will backfire and keen that the effects are visible.
One fear is that some of the cheap goods that were destined for US markets will now be diverted to Europe, flooding its market.
Another fear is how the Windsor Framework will be affected, now that there are different US tariffs on either side of the Irish border.
And finally there is that insult from the President, who called the European Union “pathetic”. A few minutes later, a senior EU diplomat sent me a message saying “the US is Brexiting the world, but you can’t stop the march of folly”.
Transatlantic relations are getting even icier.
Canadian Prime Minister Mark Carney said his country would fight back with countermeasures.
“It’s essential to act with purpose and with force, and that’s what we will do,” he told reporters.
Mexico’s president, Claudia Sheinbaum, said she wouldn’t pursue a “tit-for-tat” strategy but that a “comprehensive programme” would be announced later today.
She added: “It’s not a question of if you impose tariffs on me, I’m going to impose tariffs on you. Our interest is in strengthening the Mexican economy.”
No new tariffs were announced for Mexico or Canada, after Mr Trump previously set a 25% rate on all goods entering from both countries, before announcing some exemptions and delays.
Australian Prime Minister Anthony Albanese said the 10% tariff on his country – the lowest level – was not reciprocal – and “not the act of a friend”.
“It is the American people who will pay the biggest price for these unjustified tariffs,” he said.
“This is why our government will not be seeking to impose reciprocal tariffs. We will not join a race to the bottom that leads to higher prices and slower growth.”
Italian Prime Minister Giorgia Meloni, seen as close ally of the US president, called the tariffs “wrong” and said they would not benefit the US.
“We will do everything we can to work towards an agreement with the United States, with the goal of avoiding a trade war that would inevitably weaken the West in favour of other global players,” she said.
Spanish Prime Minister Pedro Sanchez vowed to protect the country’s companies and workers and to “continue to be committed to an open world.”
His Swedish counterpart, Ulf Kristersson, said: “We don’t want growing trade barriers. We don’t want a trade war.
“We want to find our way back to a path of trade and cooperation together with the US, so that people in our countries can enjoy a better life.”
New Zealand trade minister Todd McClay said: “We won’t be looking to retaliate – that would put up prices on New Zealand consumers and it would be inflationary.”
He denied his country had a 20% tariff on US imports – as claimed on Mr Trump’s chart – and said it was actually below 10%.
The UK economy unexpectedly shrank in May, even after the worst of Donald Trump’s tariffs were paused, official figures showed.
A standard measure of economic growth, gross domestic product (GDP), contracted 0.1% in May, according to the Office for National Statistics (ONS).
Rather than a fall being anticipated, growth of 0.1% was forecast by economists polled by Reuters as big falls in production and construction were seen.
It followed a 0.3% contraction in April, when Mr Trump announced his country-specific tariffs and sparked a global trade war.
A 90-day pause on these import taxes, which has been extended, allowed more normality to resume.
This was borne out by other figures released by the ONS on Friday.
Exports to the United States rose £300m but “remained relatively low” following a “substantial decrease” in April, the data said.
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Overall, there was a “large rise in goods imports and a fall in goods exports”.
A ‘disappointing’ but mixed picture
It’s “disappointing” news, Chancellor Rachel Reeves said. She and the government as a whole have repeatedly said growing the economy was their number one priority.
“I am determined to kickstart economic growth and deliver on that promise”, she added.
But the picture was not all bad.
Growth recorded in March was revised upwards, further indicating that companies invested to prepare for tariffs. Rather than GDP of 0.2%, the ONS said on Friday the figure was actually 0.4%.
It showed businesses moved forward activity to be ready for the extra taxes. Businesses were hit with higher employer national insurance contributions in April.
The expansion in March means the economy still grew when the three months are looked at together.
While an interest rate cut in August had already been expected, investors upped their bets of a 0.25 percentage point fall in the Bank of England’s base interest rate.
Such a cut would bring down the rate to 4% and make borrowing cheaper.
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7:09
Is Britain going bankrupt?
Analysts from economic research firm Pantheon Macro said the data was not as bad as it looked.
“The size of the manufacturing drop looks erratic to us and should partly unwind… There are signs that GDP growth can rebound in June”, said Pantheon’s chief UK economist, Rob Wood.
Why did the economy shrink?
The drops in manufacturing came mostly due to slowed car-making, less oil and gas extraction and the pharmaceutical industry.
The fall was not larger because the services industry – the largest part of the economy – expanded, with law firms and computer programmers having a good month.
It made up for a “very weak” month for retailers, the ONS said.
Monthly Gross Domestic Product (GDP) figures are volatile and, on their own, don’t tell us much.
However, the picture emerging a year since the election of the Labour government is not hugely comforting.
This is a government that promised to turbocharge economic growth, the key to improving livelihoods and the public finances. Instead, the economy is mainly flatlining.
Output shrank in May by 0.1%. That followed a 0.3% drop in April.
However, the subsequent data has shown us that much of that growth was artificial, with businesses racing to get orders out of the door to beat the possible introduction of tariffs. Property transactions were also brought forward to beat stamp duty changes.
In April, we experienced the hangover as orders and industrial output dropped. Services also struggled as demand for legal and conveyancing services dropped after the stamp duty changes.
Many of those distortions have now been smoothed out, but the manufacturing sector still struggled in May.
Signs of recovery
Manufacturing output fell by 1% in May, but more up-to-date data suggests the sector is recovering.
“We expect both cars and pharma output to improve as the UK-US trade deal comes into force and the volatility unwinds,” economists at Pantheon Macroeconomics said.
Meanwhile, the services sector eked out growth of 0.1%.
A 2.7% month-to-month fall in retail sales suppressed growth in the sector, but that should improve with hot weather likely to boost demand at restaurants and pubs.
Struggles ahead
It is unlikely, however, to massively shift the dial for the economy, the kind of shift the Labour government has promised and needs in order to give it some breathing room against its fiscal rules.
The economy remains fragile, and there are risks and traps lurking around the corner.
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7:09
Is Britain going bankrupt?
Concerns that the chancellor, Rachel Reeves, is considering tax hikes could weigh on consumer confidence, at a time when businesses are already scaling back hiring because of national insurance tax hikes.
Inflation is also expected to climb in the second half of the year, further weighing on consumers and businesses.
The government is speeding up its adoption of AI to try and encourage economic growth – with backing from Facebook parent Meta.
It will today announce a $1m (£740,000) scheme to hire up to 10 AI “experts” to help with the adoption of the technology.
Sir Keir Starmer has spoken repeatedly about wanting to use the developing technology as part of his “plan for change” to improve the UK – with claims it could produce tens of billions in savings and efficiencies.
The government is hoping the new hires could help with problems like translating classified documents en masse, speeding up planning applications or help with emergency responses when power or internet outages occur.
The funding for the roles is coming from Meta, through the Alan Turing Institute. Adverts will go live next week, with the new fellowships expected to start at the beginning of 2026.
Technology Secretary Peter Kyle said: “This fellowship is the best of AI in action – open, practical, and built for public good. It’s about delivery, not just ideas – creating real tools that help government work better for people.”
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He added: “The fellowship will help scale that kind of impact across government, and develop sovereign capabilities where the UK must lead, like national security and critical infrastructure.”
The projects will all be based on open source models, meaning there will be a minimal cost for the government when it comes to licensing.
Meta describes its own AI model, Llama, as open source, although there are questions around whether it truly qualifies for that title due to parts of its code base not being published.
The owner of Facebook has also sponsored several studies into the benefits of government adopting more open source AI tools.
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0:46
Minister reveals how AI could improve public services
Mr Kyle’s Department for Science and Technology has been working on its mission to increase the uptake of AI within government, including through the artificial intelligence “incubator”, under which these fellowships will fall.
The secretary of state has pointed to the success of Caddy – a tool that helps call centre workers search for answers in official documents faster – and its expanding use across government as an example of an AI success story.
He said the tool, developed with Citizens Advice, shows how AI can “boost productivity, improve decision-making, and support frontline staff”. A trial suggested it could cut waiting times for calls in half.
My Kyle also recently announced a deal with Google to provide tech support to government and assist with modernisation of data.
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Joel Kaplan, the chief global affairs officer from Meta, said: “Open-source AI models are helping researchers and developers make major scientific and medical breakthroughs, and they have the potential to transform the delivery of public services too.
“This partnership with ATI will help the government access some of the brightest minds and the technology they need to solve big challenges – and to do it openly and in the public interest.”
Jean Innes, the head of the Alan Turing Institute, said: “These fellowships will offer an innovative way to match AI experts with the real world challenges our public services are facing.”