'Liberation Day' explained: What are Trump's tariffs and how will they impact the UK?
2 April 2025, 20:35 | Updated: 2 April 2025, 23:15
Donald Trump has announced a slew of economic tariffs on countries across the globe, including the UK, on Wednesday night in what he has branded “Liberation Day.”
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But what is a tariff? How will Trump’s measures work and what will the impact on the UK be after the president imposed a 10% tariff on the UK?
What is a tariff?
Simply put, tariffs are taxes placed on imported goods into a country.
When tariffs are placed on goods it is the importer who pays up - meaning when Donald Trump announces tariffs this evening, it will be US citizens who pay.
Tariffs are ultimately designed to protect domestic manufacturing, boost jobs and convince consumers to buy local products.
To make up for the costs caused by tariffs, businesses often put prices up and that extra cost usually falls to the consumer.
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This means the cost of everyday items like food, technology and cars could increase in the United States following tonight’s announcements.
Outside of the US, these tariffs could damage global economies as foreign businesses' products become more and more expensive for American consumers, causing sales to fall.
What is Liberation Day?
Described in the White House as “one of the most important days in American history”, Liberation Day saw Donald Trump announce a wave of tariffs on countries across the globe.
These tariffs are reciprocal, meaning they are in response to tariffs placed on the US.
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Among the tariffs announced on Wednesday was a 10% tariff on all UK imports.
Speaking from the White House, Trump said he will sign a "historic executive order instituting reciprocal tariffs on countries throughout the world".
"We have some very, very good news today," Mr Trump said, introducing his remarks.
"A lot of good things are happening for our country.
"This is Liberation Day. 2 April 2025 will forever be remembered as the day American industry was reborn, the day America's destiny was reclaimed, and the day that we began to make America wealthy again."
How will Trump’s tariffs impact the UK?
Donald Trump on Wednesday announced 10% tariffs on all imports from the UK.
This is the lowest amount placed on any nation, but could still have a huge impact on the UK economy.
In response to US tariffs, Sir Keir has not ruled out reciprocal tariffs but is desperately attempting to agree an “economic prosperity deal” with the United States.
This deal did not come in time to spare the UK from Trump’s economic wrath but could see tariffs cancelled once it is signed.
The deal would likely bring tax breaks for US tech giants and remove tariffs on American meat imports into the UK.
Lord Sugar: Trump's tariffs are 'a disaster'
Speaking during PMQs on Wednesday, the Prime Minister said he was not ruling anything out where UK responses to possible tariffs are concerned.
Speaking from the Commons, Sir Keir said: “We have been preparing for all eventualities ahead of the confirmation of US tariffs later today.
“Let me be clear with the House. A trade war is in nobody’s interests and the country deserves, and we will take, a calm, pragmatic approach.
“That is why constructive talks are progressing to agree a wider economic prosperity deal with the US. That is why we are working with all industries and sectors likely to be impacted.
“Our decisions will always be guided by our national interest and that is why we have prepared for all eventualities and we will rule nothing out.”
UK prepares for Trump's 'liberation day' tariffs
On Wednesday, the UK's FTSE 100 fell slightly in anticipation of Trump's announcement due at 9pm.
The car industry has already learned its fate, with a 25% tariff on vehicles sent to the US - something which could cost an estimated 25,000 jobs in the UK.
The UK would not be "out of the woods" on tariffs even if it could secure an economic deal with the United States, the Chancellor has told MPs.
Rachel Reeves told the Commons Treasury Committee that the main impact on the British economy would be from "global tariffs" rather than UK-specific ones, thanks to depressed demand and higher inflation in other countries.
She said: "I think that's really important to understand, because even if we are able to secure an economic deal with the United States - which we very much want to secure and are working hard to secure that - even if that's possible, (it) doesn't mean somehow that we are out of the woods and not impacted by tariffs.
"So we don't just want to see an agreement between the UK and the US, we want to see free trade, fair trade continue."
Apprentice icon Lord Alan Sugar told LBC that tariffs will be a "disaster" for the UK and US.
Speaking on Tonight with Andrew Marr, The Apprentice star and British businessman warned that the US President "hasn't thought them through" ahead of Wednesday night's controversial levy reveal.
"Whilst he has it in mind they're good for America, I don't think he's thought it through," explained Lord Sugar.
"I don't know what negotiations we can have with this man - he's not an easy man; he's very set in his ways."
