Summary

  • US Vice-President JD Vance says there is a "good chance" a trade deal could be reached with the UK

  • The UK's trade minister agrees, but says she can't provide a "timeline" for when an agreement might be reached

  • UK imports to the US are charged a 10% tariff, with higher rates for cars, steel, and aluminium, but Vance says "we're working very hard with Keir Starmer's government" on a deal - read his full comments here

  • But when it came to US-EU relations, Vance was less complimentary, writes our North America correspondent David Willis

  • Meanwhile, the US has begun "national security" investigations into the semiconductor and pharmaceutical trade - which could lead to their tariff exemptions ending

  • And China's president Xi Jinping, who is on a visit to South East Asia, has called on Vietnam to join him to oppose "unilateral bullying" in trade

Trump tells reporters new tariffs on medicines and semiconductors will 'happen very fast'

Live Reporting

Edited by Andrew Humphrey and Barbara Tasch

  1. A US deal sounds good but it is all about the detail

    Faisal Islam
    Economics editor

    The real question about positive comments by Vice-President JD Vance about a UK-US trade deal, is what he actually means by the term "deal".

    Just after Prime Minister Sir Keir Starmer's visit to the White House in February, it was rather telling that the UK delegation referred to what was being negotiated as an "economic deal". This was meant to show that this "deal" was not about an extensive free trade agreement, covering nearly all goods.

    This time around, the "deal" seems to have been about science, technology and artificial intelligence cooperation in return for avoiding tariffs. However, there is a big problem now.

    The US has now levied a 10% tax on UK imports as part of what it called its "reciprocal tariffs". But there is no general problem with this trading relationship. In fact, the UK buys more from the US than the other way around.

    The mood music from Washington is that this 10% tariff is not for negotiation with anyone. That is the baseline tariff that has been levied on nearly all of America's trading partners.

    But the UK is in a different position than other nations.

    Most countries had faced higher tariffs - as illustrated on Donald Trump's big board - such as on electronics manufacturers in East Asia and they want to keep the levy at the 10% rate.

    The net result is that the UK may not have much to negotiate here, and yet is being treated very harshly, given there is no US trade deficit.

    Factor in the exemptions for electronics which benefit likes of China and the fact that cars, a major industry for Britain, are being tariffed at 25% and the UK side has much to complain about.

  2. Honda considers moving its US-bound car production - reports

    Workers continue vehicle assembly shortly before the line was shut down for an event at the Honda of Canada Manufacturing Plant 2 in Alliston, Ontario, on April 25, 2024 where it was announced that Japanese automaker Honda will make the largest automotive investment in Canada's history worth Can$15 billion (US$11 billion) electric vehicle investment in Ontario that will see four new manufacturing plants built in the province.Getty Images

    Japanese carmaker Honda is considering switching some of its car production from Mexico and Canada to the US, aiming to have as many as 90% of the cars it sells in the country made there, financial newspaper Nikkei reports.

    Among the tariffs imposed by US President Donald Trump was a 25% levy on car imports into the US, which he promised would spur jobs and investment in the country. He has since floated pausing the tariff to give carmakers more time to relocate.

    As reported by Nikkei, Honda is considering increasing the production of vehicles in the US by up to 30% over the next three years. The company has declined to comment on the reports.

    Since the tariff was introduced, car manufacturers have been mulling their next steps. Nissan is reportedly thinking about moving some of its production of US-bound vehicles from Japan to the US as early as this summer.

    On the other hand, earlier this month Jaguar Land Rover announced it would pause all shipments to the US, as it works to address the new trading terms after tariffs.

  3. Four things to know about possible tariffs on drugs

    A variety of pills and tabletsGetty Images

    With the Trump administration considering putting new tariffs on pharmaceutical imports - let's take a look at what countries risk being impacted the most:

    • The biggest exporters of pharmaceutical products to the US are Ireland, (which supplies 19.8% of US medicines), Germany (10.8%), Switzerland (10.7%) and China (6%), according to 2023 figures from the Atlantic Council GeoEconomics Centre
    • Drugs sales also matter to the UK, which exported £7.2bn ($9.5bn) worth of pharmaceutical and medical products to the US last year - that is 12% of total UK goods exports to the US
    • Chinese pharmaceutical exports to the US include drugs for cancer treatment, pain relievers, antibiotics, cardiovascular medicines and bandages

  4. India's stock markets recover losses

    Two of India's main stock market indices, Nifty and Sensex, have closed higher today after Trump signalled further tariff exemptions might be on the way.

    The country's Nifty 50 stock market index, which tracks India's top 50 publicly traded companies, closed 2.19% higher today – slightly shy of its closing level on 2 April, just before Trump's tariff announcement.

    India's benchmark stock index, the Sensex, closed 2.1% higher, signalling a recovery of losses made earlier this month.

  5. How three countries are working to reduce tariff impact

    Japan’s economy minister Ryosei AkazawaGetty Images

    Japan’s economy minister Ryosei Akazawa is heading to Washington for trade discussions

    Countries around the globe are working to reach agreements with the US to limit any possible charges they might face.

    Here's a quick insight into how three have reacted:

    India

    Reuters news agency reports that India and the US have opted to pursue “a path of trade liberalisation”, according to India’s trade secretary Sunil Barthwal.

    India exports $91bn (£69bn) in goods to the US, accounting for 18% of its overall exports, and trade negotiations have been ongoing between the countries.

    Japan

    Japan’s economy minister Ryosei Akazawa says his goal is “the complete removal of additional US tariffs” and is heading to the US for talks.

    According to Reuters news agency, Akazawa is expecting to meet US Treasury Secretary Scott Bessent and trade representative Jamieson Greer.

    Indonesia

    Indonesia is also taking steps to try to appease Donald Trump and protect itself against tariffs.

    Reuters reports that the country is proposing to increase its imports of oil and gas from the US by roughly $10bn, according to its energy minister Bahlil Lahadalia.

    Officials from Indonesia are set to discuss Trump’s tariffs when they arrive in Washington for talks later today.

  6. China halts US Boeing jet deliveries - Bloomberg News

    A plane landing at Beijing airport in the background, while a man walks past the camera and cars line upAFP via Getty Images

    China has told its airlines to not take any further deliveries of jets from US aviation giant Boeing as a response to Trump’s tariffs, Bloomberg News reports, citing sources familiar with the matter.

    Beijing also told carriers to suspend purchases of aircraft equipment and parts from US companies, the sources told Bloomberg.

    American planes aren’t the only imports impacted by the China-US tariff tit-for-tat.

    The entry of US agricultural items such as beef and soybean into China has also been limited this year, a source told the Financial Times. Countries such as Brazil have in turn seen increased trade and are charging premium prices for their goods due to the demand.

    China also halted the import of US logs in March, citing the detection of pests, and its Tesla website has suspended orders for two US-imported models, according to Reuters news agency.

  7. US tariffs 'will likely increase UK unemployment rates'

    UK unemployment rates are likely to increase until the end of the year, Matt Swannell, chief economic adviser to the EY Item Club warns.

    In the three months to February, payrolled employee numbers declined, while job openings also nudged down. And in the first three months of the year, the number of jobs on offer dropped to 781,000, the latest ONS figures reveal - the lowest number of vacancies since the Covid pandemic.

    In addition to the UK's domestic context, Swannell explains that "the large increase in US tariffs and the associated policy uncertainty will likely see UK GDP growth slow and unemployment rise over the rest of this year".

    Although the UK is currently only subject to the baseline - 10% - tariff from Washington, instability and the ongoing trade war between the US and China has rocked global supply chains and markets.

  8. 'The president really loves the UK' - what exactly did Vance say overnight?

    JD Vance outside White HouseGetty Images

    It's now mid-morning in the UK, so let's have a recap of what exactly US Vice-President JD Vance said to news outlet UnHerd about a possible UK-US trade deal in comments released overnight:

    'The president really loves the United Kingdom'

    “We’re certainly working very hard with Keir Starmer’s government.

    "The president really loves the United Kingdom. He loved the Queen. He admires and loves the King. It is a very important relationship. And he’s a businessman and has a number of important business relationships in [Britain].

    "I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries."

    'I love Europe'

    “I love European people. I’ve said repeatedly that I think that you can’t separate American culture from European culture.

    "I don't want the Europeans to just do whatever the Americans tell them to do. I don’t think it’s in their interest, and I don’t think it’s in our interests, either."

    'A lot of positive trade relationships with Europe'

    “I think it will lead to a lot of positive trade relationships with Europe. And again, we very much see Europe as our ally. We just want it to be an alliance where Europeans are a little more independent, and our security and trade relationships are gonna reflect that.”

    'Lower trade deficits across the board'

    “What we want to see is lower trade deficits, really across the board.

    "What the global trading system has led to is large and persistent trade deficits across product categories, with the gross majority of countries really using the United States to absorb their surplus exports. That’s been bad for us."

  9. Trump's pharmaceuticals probe: Will healthcare cost more?

    Watch: Trump tariff will 'drastically' affect pharmaceutical supply, says CEO

    As we reported earlier, Donald Trump's administration has launched an investigation into pharmaceutical imports into the US - which could lead to exemptions on tariffs being removed.

    After a 1996 World Trade Organisation agreement, most countries - including the US - have imposed few or no tariffs on finished drugs.

    The aim has been to keep medicines affordable, and as a result the US has typically imported large amounts of finished medicines from India, Europe and China without buyers paying tariffs.

    In 2024, the US imported $213bn (£168bn) worth of medicines.

    In particular, India supplies nearly half of US generics - the cheaper versions of popular drugs - saving the country billions in healthcare costs.

    Without a trade deal, Trump's tariffs could make some Indian generics unviable, forcing companies to exit part of the market and exacerbating existing drug shortages, experts say.

    Indian drug makers also warn that tariffs could force them to raise prices, as the cost of raw materials required to produce drugs goes up - which could ultimately drive up US medical bills.

    And, the chief executive of pharmaceutical company Nutriband has warned that "people are going to die", if the cost of treatment rises due to tariffs.

  10. Remind me, why do semiconductors matter ?

    As US President Donald Trump is expected to unveil tariffs on US imports of semiconductors, here's a little more about the potential impact.

    Semiconductors, also referred to as microchips or integrated circuits, are the tiny chips powering billions of electronic devices and are central to the global economy.

    Devices: Semiconductors are used in devices such as smartphones and laptops, as well as in vehicles with electronic control systems, remote car keys and sensors.

    Communications: They are also in routers, switches, and communication infrastructures that form the backbone of the internet.

    Healthcare: The chips are also crucial for medical devices and equipment as well as implantable technology, like pacemakers and insulin pumps.

    Read more about why semiconductors matter.

  11. Semiconductor companies head for US as tariff threat looms

    NvidiaGetty Images

    Even before the most recent threat of tariffs loomed on semiconductors and associated electrical components, companies in the sector had started to move their operations into the US.

    At the start of this week, computing giant Nvidia announced that it had commissioned “more than a million square feet” of manufacturing space to build and test AI supercomputer chips in Texas.

    And, in a press release that was shared by Donald Trump on social media, Nvidia adds that computer chips have also started production at chip plants in Phoenix, Arizona.

    Meanwhile, the CEO of Advanced Micro Devices (AMD) Lisa Su says that her company’s processor chips will also start manufacturing at the same site in Arizona, according to Reuters news agency.

    This will mark the first time that AMD’s products are manufactured in the US, and Su reportedly told an event in Taipei that the US will be “very important” in having a “very resilient supply chain”.

  12. UK pharma giants in wait-and-see mode

    Dearbail Jordan
    Senior Business and Economics Reporter

    Stock markets in the UK are definitely in wait-and-see mode this morning.

    Pending any announcement from Trump on whether he will impose tariffs on the pharmaceutical sector, AstraZeneca is on the list of the FTSE 100's biggest fallers today but its share price is down just 0.95%.

    Meanwhile, shares in rival drugs-maker GSK are actually up, with the price rising 1.1%.

    The day is young - let's see if the US president says anything later on.

  13. Mixed start as some European stock markets edge higher

    European stock markets had a fairly subdued opening on Tuesday.

    The FTSE 100 in London rose by 0.63%.

    In Paris, the Cac 40 dipped by 0.21% while in Germany, traders sent the Dax up by 0.85%.

  14. UK 'in good position' on US trade deal, minister says

    Sarah Jones MP

    After JD Vance suggested there is a "good chance" a trade deal could be reached with the UK, a government minister agrees that that the UK is "in a good position".

    Speaking to BBC Breakfast, Industry Minister Sarah Jones declines to provide a "timeline" for when an agreement might be reached, but adds that "conversations are still taking place".

    Since Donald Trump's push on tariffs began, the UK has been hoping to reach a deal with the US to limit the impact of any extra charges on imports across the Atlantic.

    Jones says that her colleague, Business Secretary Jonathan Reynolds, has "had lots of conversations with his counterparts", in the hope of reaching a "secure deal" with the US.

    "Nobody wants tariffs, no one wants a trade war," Jones adds.

  15. Vance strikes 'conciliatory tone' but is 'still quite provocative' in UnHerd interview

    JD VanceReuters

    We've been hearing more about the interview the US Vice-President JD Vance gave to the UnHerd news outlet's US editor Sohrab Ahmari.

    Vance struck a "conciliatory tone" compared to previous comments about Europe that were "quite harsh", Ahmari tells the BBC's Today programme.

    Vance's core message "was still quite provocative" but was "couched in friendlier rhetoric", Ahmari says.

    The US vice-president told UnHerd that President Trump loves Britain and was working hard with UK Prime Minister Sir Keir Starmer on a trade deal. He talked about Trump's affection for the late Queen and his admiration for the King. Vance said there was a cultural bond between the US and the UK which lead him to believe there should be a "carve out" for Britain as the tariffs regime came in.

    Vance told UnHerd that globalisation was hurting many Americans. He said the global trading system has been "bad for American manufacturers. It’s been bad for workers. And God forbid, if America ever fought a future war, it would be bad for America’s troops.”

  16. Two probes launched: Why is Trump investigating drugs and computer chips?

    Drugs stock photoGetty Images

    In two separate filings with the US Federal Register, Donald Trump’s administration says it is investigating the import of semiconductors and pharmaceuticals on national security grounds.

    The probes, known as Section 232 investigations, will collect public comments for 21 days before a decision is made.

    These industries - which have so far been exempt from the 10% import charges that began on 5 April - might face tariffs after the investigation is complete.

    Although the probes are proceeding on the basis of national security grounds, Donald Trump has consistently suggested he wants to see more drugs and computer chips made in the US.

    As it stands, the country currently relies heavily on Taiwan for its semiconductor supply, with the Taiwan Semiconductor Manufacturing Company (TSMC) providing over half of the world's supply.

    And, after Trump exempted smartphones and other electronics from 125% tariffs on China, he hinted that this might change when he wrote that “we need to make products in the United States, and that we will not be held hostage by other Countries”.

    Similarly, the US president has threatened that he will soon announce “major” tariffs on imported pharmaceuticals, which he suggested will force companies to “leave China”.

  17. Analysis

    A calmer week - but there could be more disruption ahead

    Faisal Islam
    Economics editor

    Financial markets have calmed so far this week, with modest gains for global shares, and falls in government borrowing costs.

    The relative calm after last week’s rollercoaster is mainly down to the perceived US retreat at the weekend, that saw smartphones and electronics mainly exempted from tariffs. Members of Donald Trump’s cabinet have also been engaged in negotiations with other countries over possible further exemptions to tariffs.

    But at the same time, the administration has now started formal national security investigations that could well lead to a new set of sectoral tariffs on semiconductors and medicines.

    Separately, global cargo shipping is showing some signs of diversion and disruption, in anticipation of a possible new million-dollar port tax on ships that were made in China docking at US ports.

    British retailers are also reporting some Chinese exports diverting from the US to Europe as a result of the tariffs.

  18. Analysis

    Vance strikes warmer tone with UK than EU

    David Willis
    Reporting from Washington

    Speaking to UnHerd - his first major interview with a European news outlet since taking office - JD Vance stressed the Trump administration's affection for the UK, and said trade talks were taking precedence over negotiations with other European nations.

    Vance also stressed the president's admiration of King Charles, and what he called America's "cultural affinity" with the UK.

    When it came to Europe however, the vice-president was less complimentary.

    He said a lack of military spending threatened to leave European nations - with the exceptions of Britain, Poland and France - "a security vassal of the United States", as he put it.

    And defending the administration's trade policy, Vance said President Trump was only seeking fairness, but conceded that - in order for the policy to prove effective - officials also had to be responsive to what the business community was telling them.

    While not dealing with international relations, JD Vance was presenting college football trophies on Monday - which didn't go entirely to plan...

  19. If you're just joining us now

    If you're just joining us now, here's a quick look at the latest developments:

    • US Vice-President JD Vance says there is a "good chance" of a trade deal with the UK. "We're certainly working very hard with Keir Starmer's government," Vance said
    • The Trump administration has moved forward with plans to impose tariffs on semiconductors and pharmaceuticals, in a move that could escalate the US president's trade war
    • Although semiconductors and pharmaceuticals are currently exempt from the 10% import tariffs that the US started imposing on 5 April, Trump had previously warned they would face separate tariffs
    • The Commerce Department now says it has begun investigating both sectors on national security grounds
    • It comes as Chinese leader Xi Jinping continues his 'charm offensive' tour of South East Asia, calling on Vietnam to jointly oppose "unilateral bullying” and maintain the stability of global free trade and supply chains
    • Meanwhile, the International Monetary Fund warned on Monday that major geopolitical risk events, including trade tensions, could lead to stock market turmoil

    Stay with us as we continue bringing you the latest updates.

  20. 'Good chance' of US-UK trade deal, says Vance

    US Vice President JD Vance says there is a "good chance" a trade deal could be reached with the UK, as the dust continues to settle from America's global trade shakeup.

    "We're certainly working very hard with Keir Starmer's government," Vance said in an interview on Monday with the UnHerd website.

    The global stock market has been rocked by turbulence since 2 April, after President Donald Trump announced sweeping tariffs on nearly every country.

    The unprecedented US trade policy manoeuvre included a 10% "baseline" tariff on all imports from the UK and other long-standing trade partners.

    Read the full story here.

    US Vice-President JD Vance pictured inside the White House.Getty Images