Trump's Tariffs Threaten Global Economy, Warns UK Shadow Chancellor

Trump's Tariffs Threaten Global Economy, Even with UK Exemption

Rachel Reeves, the UK's Shadow Chancellor, has warned that the global trade war triggered by President Trump's swingeing tariffs will harm the UK economy, even if Britain is exempt.

Reeves argues that the tariffs will lead to higher inflation and slower economic growth, even if the UK avoids direct impact. She points to the example of Canada, which has already been hit with a 25% tariff on its goods entering the US. In retaliation, the Canadian province of Ontario has threatened to cut off its energy supply to the US, remove American alcohol from its shelves, and cancel any partnership with Elon Musk's Starlink.

China has also retaliated against the tariffs, vowing to fight to the "bitter end" and announcing its own tariffs on American imports.

Reeves emphasizes the importance of free and open trade, stating that tariffs harm both sides of a trade deal. She believes that the UK will be affected by slowing global trade, higher inflation, and slower GDP growth, even if it avoids direct tariff application.

Despite the trade war, Reeves acknowledges the US as the UK's closest partner on defense. She also highlights the need to support UK businesses and jobs through increased defense spending, while still remaining open to foreign manufacturers.

Reeves concludes by stating that all options are being considered regarding frozen Russian assets, following calls to use them to aid Ukraine.