Trump expands his trade war and bad news for Reeves – what you need to know from Money this week
By Jess Sharp, Money live reporter
It was a week when we learned what happens when you try to stand up to Trump’s trade war (Canada, EU), and when an alternative, passive approach was put into action (UK).
The US president’s 25% tariffs on all steel and aluminium imports took effect, impacting UK products worth hundreds of millions of pounds.
Sir Keir Starmer said he was “disappointed” but did not announce any retaliatory measures.
It became clear the UK is hoping its approach will help persuade Trump to offer wider exemptions and move towards a US-UK trade deal.
The European Union took a different approach, threatening to impose tariffs of its own affecting €26bn (£21.9bn) of US goods from the start of next month.
It said the charges would apply to American steel, aluminium, textiles, home appliances, agricultural goods and whiskey.
The Trump administration, playing the playground bully, shot back with a threat of a 200% tariff on EU alcohol.
A similar story played out with Canada, which was told to expect 50% tariffs (instead of the 25% that came in on Wednesday) after the province of Ontario whacked a 25% charge on electricity being sent to northern US states. Neither threat materialised.
While Trump is aiming to protect US manufacturing, bolster jobs and make foreign-made products less attractive, economists believe his tariffs will raise costs in the US, push up inflation and keep interest rates higher for longer.
Even Tesla, the electric car company owned by Trump’s biggest cheerleader Elon Musk, wrote to the government warning that the trade issues could hurt American companies.
Our business presenter Ian King had a look at the hammering Tesla has suffered in the piece below…
Investor concerns, mostly linked to the tariff war, have reduced Tesla’s market value by around £800bn – Trump ended up buying one of the cars in a bizarre, televised show of support for the business and Musk.
Stock markets felt the worst of the tariff effects as consumer and investor confidence slumped, but they started to pick up slightly by the end of the week.
Our deputy political editor Sam Coates explored what all of this means for the UK and whether we’ll be seeing higher prices creeping in…
The UK’s chancellor was dealt a blow on Friday when January’s GDP figures showed that despite her calls for growth, the economy had contracted by 0.1%.
The fall was mainly driven by a decline in the production sector, with output dropping 0.9%.
It’s worse than economists had expected, with many predicting 0.1% growth.
Rachel Reeves said the country was “feeling the consequences” of a changing world as she came under pressure to use her spring statement in less than two weeks time to change course.
She is due to deliver the statement on 26 March, which is widely expected to include controversial cuts to the welfare budget.
At the same time, the Office for Budget Responsibility is widely expected to downgrade its forecasts for UK growth.
Our business correspondent Paul Kelso explains here why the economy isn’t listening to Reeves…
The story that most captured our readers’ attention this week (we have analytics for this stuff) concerned Grammy-nominated singer Dawn Robinson.
The ’90s R&B singer from the girl group En Vogue revealed she has been living in her car for the last three years…
You also enjoyed the success our cost of living specialist Megan Harwood-Baynes had fixing this week’s Money Problem.
She helped our reader Isla get a £500 refund from Turkish Airlines after she was kicked off a plane for having a nut allergy.
You can read how she did it here…
We’re signing off for the week now – but don’t forget to check out our long read from 8am tomorrow morning.
This week, we take a look at how childcare costs and job demands are driving mothers out of the workforce.
We’ve spoken to some mums who say going back to work and paying for childcare means they’ll still end up in the red each month, and the changes they think the system needs.
