The prospect of a transatlantic trade war intensified today as President Donald Trump threatened to impose a 100% tariff on goods from European nations, a move that would hammer industries from German carmakers to French winemakers. In a series of early morning posts on social media, Trump accused the EU of “unfair trade practices” and said he would target “luxury goods and everything in between”. The threat, if enacted, would represent a dramatic escalation of the trade tensions that have simmered since his first term.
Britain, positioning itself as a bridge between the US and Europe, has taken the lead in a diplomatic counter-offensive. Prime Minister Rishi Sunak has spoken to both Trump and European Commission President Ursula von der Leyen, urging restraint. A Downing Street spokesperson said the PM “emphasised the importance of free and fair trade for working people on both sides of the Atlantic”. But with a UK general election looming, the stakes are high. Labour leader Keir Starmer accused the government of “dithering” and called for a coordinated European response.
The real impact, however, will be felt at the kitchen table. A 100% tariff on European imports would mean a price hike on everything from Spanish olive oil to Italian shoes. For the British consumer, already grappling with the highest inflation in decades, this is a bitter pill. The cost of living crisis, which has seen food banks stretched and energy bills soar, would be compounded by trade barriers that threaten jobs in sectors like aerospace and pharmaceuticals.
Union leaders reacted with fury. Sharon Graham, general secretary of the Unite union, said: “Working people did not cause this trade war, but they will pay the price. The government must guarantee job protection if tariffs hit.” The TUC called for emergency talks with business and union leaders. In the North, where manufacturing still hangs on, the threat is existential. A steelworker in Sheffield told me: “We’ve seen this before with the steel tariffs. It’s always the workers who lose.”
There is still room for diplomacy. The UK, as a non-EU member, could in theory strike a separate deal with Washington. But Trump has shown little interest in nuance. The EU, for its part, has prepared retaliatory tariffs on American goods, including Harley-Davidson motorcycles and bourbon whiskey. That would hurt Republican states, but it could also spark a “buy American” backlash that would hit UK exporters.
The Bank of England has warned that a full-blown trade war could tip the UK into recession. Even as unemployment remains low, real wages are still falling. The pound wobbled on the currency markets this morning, a sign of investor nerves.
For now, the Government is scrambling. Trade Secretary Kemi Badenoch is expected to fly to Washington later this week. But critics say it is déjà vu all over again: a crisis manufactured in the White House, with Britain caught in the middle. As one factory manager in Birmingham put it: “We haven’t recovered from the last trade war. Another one would finish us.” The clock is ticking.
