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Topics: Cost of Living, Donald Trump, Money, UK News, US News
President Donald Trump announced his 'Liberation Day' tariffs on Wednesday (2 April), claiming that it is the USA's 'declaration of independence'.
He revealed the tariffs that would be placed on every country around the world, ranging anywhere from 10 to 54 percent.
Three big countries were not included as part of his announcement, as the US don't trade with Russia, and have already imposed tariffs on neighbours Canada and Mexico.
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So while the US President has ensured to hit the 'worst offenders' with the highest tariffs, with China getting the worst of it, the question is, how badly was the UK hit?
Well, it came away in as good of a situation as you could have hoped, with a tariff of 10 percent, though 'productive negotiations' of an economic deal with the US are currently ongoing.
In case you missed it, tariffs can simply be described as taxes on goods that are imported into the US.
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With Trump increasing these, the short-term result is that customers will have to pay more for products, as the President believes that businesses will be pushed to buy local products instead.
But in the long run, the 78-year-old claims that it will be a fresh of fresh air after American taxpayers have been 'ripped off for more than 50 years'.
While the European Union got hit with a 20 percent tariff, Brits can breathe a sigh of relief - although a number of goods will be seeing an increase in price.
Prime Minister Keir Starmer explained to MPs in the Commons yesterday that they would be taking a 'calm, pragmatic approach'.
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So, which everyday items will be impacted?
A 25 percent tariffs on cars imported to the US will take effect, which also includes vehicle parts - and this will take a toll on car buyers in the UK.
How, you ask?
Well, much like British car manufacturers, many car makers around the world such as Mercedes-Benz and BMW rely on sales in the US, and if this is impacted, then prices of vehicles in the UK may skyrocket to deal with the losses on tariffs.
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But with British cars, the likes of Aston Martin, Jaguar, Land Rover and Mini are at risk, as the US is the nation's car sector's single biggest market by country, raking in £6.4bn in 2023.
While Trump pointed out that this will be an opportunity for car makers to follow Hyundai's plans to build a £4.5bn steel plant in Louisiana to avoid tariffs.
Researchers at the Institute For Public Policy Research (IPPR) claimed that the sector may be destabilised, and advised that the government encourage Brits to buy local electric cars to make up for losses.
Inflation in nations across the world could directly affect interest rates on our shores, possibly causing interest rates to be cut by the Bank of England, if it sees instability in the financial markets.
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Senior Personal Finance Analyst at Interactive Investor, Myron Jobson, told The Mirror: "If tariffs contribute to higher inflation, central banks may be forced to tighten monetary policy, which can weigh on bonds and borrowing costs.
"This could impact everything from mortgage rates to corporate investment, potentially slowing economic growth."
He noted that investors that have a hand in US equities, through investments or even pensions and ISAs, could cause some instability in the markey.
"Any sell-off in US stocks could drag down the performance of funds with heavy US exposure – not least global funds as they typically have a substantial weighting to US equities," he added.
This includes soft drink cans, as Trump's previously announced tariffs on aluminium imports to the US came into play in March.
The move could see everyday products made of these materials increase in price, as companies that manufacture these goods could pass export costs to British businesses.
As a result, the construction industry could also be hit, among other industries that rely on the material.
This is in addition in the 25 percent import tax on UK steel after previous quota arrangements and exemptions were cancelled by Trump.
The UK relies on international products, so items on supermarket shelves could see a massive uptake as other nations try to cope with the steep new tariffs imposed by Trump.
In fact, 48 percent of food consumed in the country is imported, with a large chunk coming from the EU, which as we know, has been hit hard.
Plastic goods may also see an uptick, as China, responsible for the manufacturing of a lot of these products, will pay a higher rate of 34 percent, which can increase to 54 percent when other trade restrictions are factored in.
As a result, this could speed up the rate of inflation, with our pockets suffering in the long run.