What would the impact of a 20% universal tariff be on the UK?published at 19:51 British Summer Time 1 April

19:51 BST 1 April

Faisal Islam
Economics editor

A 20% universal tariff for all imports into the US would be a major shock to the world economy.

The idea was promoted by Donald Trump as a candidate, but faded away in recent weeks. It has been resurrected since the weekend, and has featured in advisers’ plans, and is really the only way to get to some of the “trillions of dollars” of revenue mentioned in DC.

The UK would be hit by a material amount, as the single largest country trading partner. But the big losses would come if there is an equivalent global retaliation, with the UK economy shrinking by 1%, enough to wipe out growth and lead to pressure for tax rises or spending cuts.

The total cost around the world, could, according to an Aston University Business School be $1.4 trillion, as trade is diverted, and prices rise.

This is hugely dependent however on what else happens around the world. For example some in Cabinet feel the hit to US business could be offset by cheaper manufacturing arriving to the UK and lowering prices. Should the EU retaliate in full and the UK not, there is also the possibility of UK trade with the US actually increasing.

Trade wars are hard to win, and easy for everyone to lose. A universal tariff of 20% would be an historic hit to the global trading system.

Image source, Reuters

We now know when Donald Trump will announce his highly-anticipated tariffs.

The US president will deliver his remarks tomorrow at 16:00 ET (21:00 BST) in the White House Rose Garden.

An invite from the White House calls it a "Make America Wealthy Again Event".

The BBC hit the streets of New York City to hear from consumers on the eve of Trump's tariff policy rollout, which he's self-titled "Liberation Day".

Shoppers say they are worried, telling the BBC: "I think it's going to hurt a lot of people in this country."

Image source, Getty Images

"Liberation Day" is how President Trump is dubbing 2 April - the day he's planning to impose further charges on goods imported to the US.

Trump is locked in talks with his trade and tariffs team, "perfecting" the fine details of the message he will deliver tomorrow, his press secretary, Karoline Leavitt, told reporters earlier on.

No one knows for sure what these details are. But what's certain is the tariffs will be extensive (indeed, Trump himself has suggested they will hit all countries).

With that in mind, here's a quick digest of today's developments:

• Speaking to reporters, Leavitt said "quite a few countries" were contacting the White House for last-minute negotiations, and that the president was open to taking calls

• Since the weekend, several US outlets have quoted reports that say proposals for a 20% universal tariff on all imports into the US were being discussed, but the White House has made no comment on this
• Foreign Secretary David Lammy says the UK is preparing "for the worst" but "all options remain on the table", repeating Prime Minister Keir Starmer's latest take on the matter
• Other nations are taking a less cautious approach. The EU's Ursula von der Leyen says the bloc's ready to retaliate if necessary, and Canadian Prime Minister Mark Carney says "we will not disadvantage Canadian producers and Canadian workers relative to American workers"
• Trump also faces opposition at home, with the US Senate due to vote in the coming days on a resolution aimed at blocking the use emergency powers to impose 25% tariffs on Canada

We'll continue to update you on all the latest - stay tuned.

Natalie Sherman
New York business reporter

Behind the counter at Di Palo’s Fine Foods in New York City last week, proprietor Luigi Di Palo shook his head, brushing off a request from a customer hoping to lock in a price for six months' worth of parmesan wheels from Italy.

"I can't give you any long-term deal!" he said, reminding his customer of tariffs that could be about to raise the cost of nearly everything in the store.

"I know it's going to be painful for us, very painful,” said Di Palo, whose family has sold Italian food in New York City for more than 100 years.

As soon as Trump was elected, Di Palo started to stock up on supplies, remembering the fallout from trade fights in Trump's first term, which led to tariffs on billions of dollars of imports, including European wine and cheese.

He is now leasing about 20% more storage space to house the extra wine and hard cheese he has brought in. But a business that prides itself on having the finest and freshest ingredients can only stockpile so much, Di Palo said.

The business weathered Trump's first term by raising prices, and Di Palo said he had confidence in Trump as a businessman and negotiator.

But he admitted: "The uncertainty weighs heavily on our minds."

As we mentioned earlier, Senator Tim Kaine is trying to block President Trump from using emergency powers to impose tariffs on Canada.

Posting on his Truth Social platform, Trump accuses Kaine of "trying to halt our critical tariffs on deadly fentanyl coming in from Canada".

He says Senate Republicans "MUST vote to keep the national emergency in place" to "end the scourge" of the synthetic opioid.

Trump says a Democrat victory would be "devastating for the Republican Party and, far more importantly, for the United States".

Image source, Getty Images

Democratic Senator Tim Kaine, who has tabled a resolution in the Senate to stop Trump's tariffs on Canada, recently spoke to reporters outside the US Capitol.

The vote will most likely take place on Wednesday, having originally been expected to take place today, he said.

He claims that Trump's use of emergency powers to impose the import charges are based on "fake Canadian emergencies", and calls Canada a "friend, not an adversary".

"We need to stand strong for a strong relationship with a good ally," Kaine said.

Kaine said he's proud that his resolution has six Republican co-sponsors, but adds that the outcome will be difficult to predict and likely close. If it were to pass the Senate, it would still need to pass in the House. And both chambers are controlled by Republicans.

Bernd Debusmann Jr
Reporting from the White House

We've just wrapped up a relatively short White House briefing with Press Secretary Karoline Leavitt, who was in a rush to get to an event with First Lady Melania Trump.

Just before the briefing concluded, Leavitt said that "quite a few countries" have called President Trump to discuss the tariffs, although she did not specify how many.

"But, again, there's one country that President Trump cares most about, and it's the United States of America," she adds.

Earlier, Leavitt said that the president is "always up" for a phone call or "good negotiation", potentially leaving the door open for countries to arrive at last-minute deals with the administration.

Image source, Getty Images

As we've been reporting, the uncertainty around Trump's Wednesday address means countries all over the world are bracing for potential new tariffs.

Vietnam has taken a slightly different approach to weathering their impact, saying it is cutting import taxes on a range of goods.

As of today, according to a Vietnamese government announcement, import taxes on liquified natural gas, some food and wood products, as well as vehicles will be cut, in some cases by more than half.

Vietnam has a US$123.5 billion trade surplus with the US - behind only China and Mexico, making it particularly vulnerable to the White House's tariffs.

The country is a manufacturing hub for American sportswear and outdoor apparel brands. It's also among the world's most trade-dependent economies.

The Vietnamese Prime Minister Pham Minh Chinh previously said he wants to take a more diplomatic approach to weathering a possible trade war with Washington.

Meanwhile, Israel says it will remove all tariffs on US imports in anticipation of the White House's announcement of new levies tomorrow.

Finance Minister Bezalel Smotrich says he has begun the process to get rid of the remaining tariffs, which according to the finance ministry, add up to about 42 million shekels (£8.8m) a year.

The US is Israel's closest ally, and the two share a four-decade-old free trade agreement. All but about 2% of goods from the US is tariff-free.

"Completely eliminating tariffs on imports from the US is a significant step in safeguarding the Israeli economy during a sensitive period," Smotrich says.

Bernd Debusmann Jr
Reporting from the White House

Leavitt has confirmed that the tariffs will come into effect tomorrow, 2 April.

"Liberation Day in America would be taking place today, if not for April Fool's Day, but tomorrow will be the day, and he [Trump] has been talking about it for a while," Leavitt adds.

Asked about whether senior citizens have expressed any fears to the president and White House about their finances amid uncertainty over tariffs, Leavitt acknowledges that "they are legitimate concerns" that Trump is taking seriously.

"Tomorrow's announcement is to protect future generations," she adds, arguing that tariffs will "ensure that there are jobs here in the United States of America for their children".

She also points to Trump's promises to lower inflation and energy prices as signs that Americans need not fear the impact of the tariffs.

Bernd Debusmann Jr
Reporting from the White House

Karoline Leavitt reveals that President Trump is currently with his trade and tariffs team, "perfecting" the message he will deliver tomorrow.

She has so far avoided giving any details on tomorrow's tariff announcement, saying - as she did yesterday - that she does not want to get ahead of Trump's announcement.

Earlier, Leavitt was asked whether there was still anything foreign leaders could do to stave off tariffs.

Trump is "always up" for a phone call or "good negotiation", she responded.

Bernd Debusmann Jr
Reporting from the White House

Image source, Bernd Debusmann Jr/BBC

Karoline Leavitt's briefing to the media in the White House's extremely crowded Brady Briefing room began just a few minutes ago, and she's dived straight into the topic of tomorrow's "liberation day".

Trump's announcement, she says, will be one of the "most important days in modern American history".

"Our country has been one of the most focused economies in the world," she adds. "But too many foreign countries have their markets closed to our exports. This is fundamentally unfair."

Like Trump in the Oval Office yesterday, Leavitt is pointing to recent foreign investments in the US as evidence that tariffs are already having a positive impact.

"American workers and businesses will be put first under President Trump, just as he promised on the campaign trail," she says.

White House press secretary Karoline Leavitt is holding a briefing with the media.

You can click watch live at the top of this page to follow along.

We're not sure what the agenda for Leavitt is today, but there will no doubt be plenty of journalists in the room ready to ask about Wednesday's tariffs.

Canadian Prime Minister Mark Carney has just been asked about Trump's planned tariffs and how the country will respond, a key issue for the Liberal leader in Canada's upcoming election.

Carney tells reporters that "we will not disadvantage Canadian producers and Canadian workers relative to American workers".

Carney says there are things the country can do to "level the playing field", but it will depend on what broader measures the US takes.

He tells reporters that Canada's response will be "intelligent".

The US President will announce new tariffs tomorrow.

More than two hours into trading, the US stock market is rising slightly after a shaky start. American investors are readying to respond to whatever announcement on tariffs we hear tomorrow from the White House.

Here's where the major indices stand currently:

S&P 500: +0.44%

Dow: +0.18%

Nasdaq: +0.85%

We'll be keeping an eye on market movements over the course of the day.

The Senate - which is one part of the US government that makes laws - is expected to vote later today on a resolution aimed at blocking President Trump from using emergency powers to impose 25% tariffs on Canada.

The resolution from Senator Tim Kaine, a Democrat, has been met by some public support from Republican senators, including Rand Paul and Susan Collins.

We'll be watching and waiting to see if that gets under way, and will update you on any result as soon as we get it.

We're also expecting Kaine to speak at 11:45 EST (16:45 BST).

Chris Page
Ireland correspondent

Image source, PA Media

The leader of the Irish government, the Taoiseach Micheál Martin, says the expected US tariffs will be a “fundamental shift”, which will be different from any economic upheaval which Ireland has previously experienced.

Among EU countries, Ireland is the most reliant on the US as an export market. In 2024, almost a third of the country’s total exports were to the US - worth €73bn (£61bn).

President Trump has previously indicated his discontent with the scale of manufacturing by US pharmaceutical firms in Ireland.

In the Irish Parliament, Martin says investors in Ireland are already “pausing decisions” to see how the tariffs issue play out. He says the EU will take a “strategic response” and it will be important that any counter-measures did not compound the problems.

As we wait to hear what tariffs Trump will announce tomorrow, some US news outlets are reporting that proposals are being discussed on a blanket tariff of 20% being imposed on all foreign goods entering the US.

It's not official White House policy, and no one knows yet which tariffs will be announced, but if such a broad tariff were to be unveiled, it could have much bigger implications and touch just about every country that trades with the US.

Among those directly affected would be ordinary American households, who could end up paying 2.6% more for goods if countries retaliated with their own tariffs, according to analysis by Yale University, external. In 2024 terms, it would add up to an average loss of up to $4,200 (£3,250) per household.

According to the analysis, food prices in particular would rise 3.7% - that is roughly twice the recent rate of grocery inflation. Prices of computers, clothing, and crops would also significantly rise.

Yale's modelling suggests the blankets tariffs would shrink the size of the US economy in both the short and long term. On the other hand, it could raise $3.1-4.1 trillion (£2.4-3.2 trillion) for the US treasury from 2026-2035 with conventional scoring, external.

Image source, PA Media

The UK is preparing "for the worst" over the prospect of US tariffs, says UK Foreign Secretary David Lammy, but "all options remain on the table".

"We are an open-trading nation. We have been that under successive governments," Lammy tells MPs in Parliament.

"It's hugely important at this time that we continue the intense conversations we're having with the US administration on getting an economic agreement but of course we prepare for the worst."

He adds that support will continue for business and industry through what's expected to be a "turbulent economic time, not just for our own country but of course much of the world".