Trump’s tariffs begin: ‘He enjoys the power, the drama, the theatricality of it’

Read time: 5 mins

In brief…

• Trump’s tariffs are here, and the UK government admits it will affect the country as much as any other, despite every effort of Keir Starmer to play nice with the new US administration.
• A former Bank of England chief economist tells The News Agents that Keir Stamer’s neutral approach to dealing with the US puts the UK in a strong position when it comes to negotiating out of the tariffs once they have been imposed.
• The News Agents say that for Trump, this situation is all about the performance, saying he loves the “theatricality” of introducing tariffs through the use of executive orders.

What’s the story?

An invite from the king. A second state visit. Silence when other countries have spoken out against Trump's actions since returning to The White House.

The UK government has pulled out all the stops to try to make sure it isn't affected by the president's tariffs, but it all appears to be for nothing.

Trump's tariffs come into effect on 2 April 2025, costing US firms more to import products from overseas in the hope of driving more internal trade and growing America's manufacturing industry.

The UK will be among the countries hit by product-specific taxes on products such as alcohol and cars, of which the UK sends billions of pounds worth of exports every year.

Experts have warned that Trump's plan is likely to backfire, and instead of improving US manufacturing, companies will instead pass on price increases to customers, further heightening America's own cost of living crisis.

Despite Trump's intention for his tariffs to make America stronger, The News Agents believe it could have the opposite effect, with the EU seeming stronger than ever in standing up to the president, and even Japan, China and South Korea promising to work together to address his plans, potentially bringing the rest of the world closer together – and freezing out both the US and UK.

Will Starmer’s silence pay off in the long term?

While the UK, and the global economy, faces an unsettling week and uncertain future, some experts are open-minded about the reality of Trump's intentions. They question how far he is willing to go and believe he will backtrack if his tariffs don't go to plan.

Andy Haldane, a former Bank of England chief economist, tells Emily Maitlis, that he is "more optimistic than most" when it comes to Trump's tariffs plan, but only because he doesn't believe the MAGA president will let himself be embarrassed on the world stage by crashing the US economy so soon into his second term.

"When push comes to shove, he will avoid egregious self harm to his own reputation, and therefore to the US economy," Haldane tells Emily, describing Trump's plan as an "elaborate poker game".

"I think deals will be struck, albeit in a messy rollercoaster way, that are less bad than the cataclysmic scenarios that's sometimes spoken about on the Trump tariffs."

He describes Starmer's approach to Trump as more "canny" than people might give him credit for, which could indeed keep the UK in the president's good books as planned.

"The knee-jerk reaction from most of the countries has been that they will retaliate, and we've been studiously neutral on that so far," he adds.

"I think, just in terms of body language atmospherics, this will help in striking a deal. We do have a few cards we could play – the digital services tax would be a case in point.

"So I think relative to others around the world, we start in a position of relative strength."

The UK currently rakes in £800 million a year from its digital services tax, and there have been suggestions the UK government could lift this on US-based businesses, in order to dodge some of Trump's tariffs.

But this, he adds, will hurt both the UK and the US.

How is a 64-year-old anti-abortion protester involved in all this?

Labour MPs have denied the case of Livia Tossici-Bolt, an anti-abortion protester who stands outside a Bournemouth clinic holding a "here to talk" sign and has been charged with a public spaces protection order by breaching a buffer zone.

The Trump administration has taken a keen interest in Tossici-Bolt, following previous criticism from JD Vance about free speech in Europe.

Emily says US interest in the anti-abortion campaigner is similar to Elon Musk's attention paid to the Rotherham grooming gangs, which he rapidly lost interest in once damage had been done, and the issue was back in British news.

"They've made her their next pin-up for ‘isn't Britain a terrible country', where you stop people and you gag them," she says.

"It's about control for Trump, not just of his own country, but of any country he deals with.

"If he thinks that he can in any way influence the courts, influence the politics, influence who protests, he wants to try and make that part of his deal."

With people being deported from the US for expressing pro-Palestinian views, Jon Sopel describes the situation as a "very hypocritical view" from a country that actively suppresses free speech.

What’s The News Agents’ take?

There has been a warning from financial services group Goldman Sachs that the chance of a US recession has jumped from 20% to 35%, and that the global economy is facing a cost of $1 trillion of lost growth over the next five years.

"The world is braced for what could be one of the biggest economic shocks we've seen in years," says Lewis Goodall.

"That is the scale of what we're talking about here if Trump decides to go for the maximal tariffs and indeed chooses to sustain them over the long term – because we know he can be rather unpredictable."

Jon believes concerns over a US, and global, recession could become a "self-fulfilling prophecy", because fears around it are so high.

"The danger of what Trump is embarking on, is that it becomes some kind of doom-loop," he says.

"People have little confidence. The markets have little confidence.

"The markets are way down on their peak and a lot of the motor manufacturers are absolutely bloody terrified of what this will mean for them."

Lewis says Trump's great love for tariffs comes from the fact they are implemented by the president and the president alone through the use of executive orders.

"Trump enjoys the power, the drama, the theatricality of it," he says.

But while he may enjoy the performance side, Jon believes it's in the execution where Trump comes up short.

"It always amazes me when I hear Trump-friendly pundits go on TV and say he is the chess grandmaster of making deals," he says.

"Donald Trump does not plan 18 moves ahead. He plans his next move, and if that turns to shit, he's got the flexibility to do another."

Listen to the latest episode of The News Agents.