Starmer condemns Trump’s UK tariff threats

US president Donald Trump said he would charge the UK a 10% tariff "on any and all goods" sent to the US from 1 February, increasing to 25% from 1 June, until a deal is reached for Washington to purchase Greenland from Denmark.

Trump said the same would apply to Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland - all of whom are members of Nato.

Sir Keir Starmer responded by signalling that Britain would not engage in a trade war with the US by imposing retaliatory tariffs, and that the dispute over Greenland should be solved through “calm discussion between allies”.

“The use of tariffs against allies is completely wrong,” he said in his address.

John Wyn-Evans, Head of Market Analysis for wealth management group Rathbones, said Trump’s tariff threat was “consistent with his habit of using trade as leverage”.

“Markets have reacted negatively, and while past episodes suggest he often retreats when economic costs build, further volatility is likely,” he warned.

Amisha Chohan, Head of Equity Research at Quilter Cheviot, added that she was not expecting a repeat of the steep market falls from last April, following Trump’s “liberation day” tariff announcement.

“This is more likely to be slower burn while diplomacy plays out,” she said.

“However, as with any tariffs they have the potential to cause volatility in inflation and thus interest rates may not come down as swiftly as investors would like, and this would ultimately be negative for markets.”

It comes as Chancellor Rachel Reeves pulled out of an event at the London Stock Exchange, marking a “new golden age” for the City, as concerns about Donald Trump’s fresh tariff threats sent global markets tumbling.

Her withdrawal came as the Prime Minister held an emergency address from Downing Street, responding to Trump’s threats to invade Greenland and impose tariffs on the UK and other European allies.