Brits count cost of Trump’s global trade chaos as UK loses tariff edge over EU

YESTERDAY’S fresh market slump on Wall Street reflects a realisation that — compared with the start of last week — the global economy is in a much more perilous state. 

Yes, Donald Trump backed away from a full-blown trade war when he chose to pause the most punitive tariffs on all countries, bar China, for 90 days. 

But there is still a ten per cent levy on exports to the US from almost every country in the world, suppressing trade and hurting supply chains. 

There is also huge uncertainty about the threat of the hefty tariffs being reasserted in 90 days, or Trump flip-flopping once again and making tariffs more severe. 

This makes it impossible for companies to invest, make decisions or even forecast their profits. 

Meanwhile, the world’s first and second biggest economies are in a tariffs death match. 

There is simply no way an effective block on trade between the US and China will not suppress worldwide growth, including in the UK. 

Trump’s decision to put all countries on a ten per cent baseline tariff has also erased the UK’s competitive edge versus the EU — which was on a 20 per cent rate. 

The next time the all-powerful Office for Budget Responsibility takes a stab at predicting our future economic growth, you can bet your bottom dollar it will be a downgrade. 

And, in the worst case scenario, that will mean the PM and his Chancellor will face a hideous political dilemma to balance the books — more tax rises or more benefits and spending cuts. 

UK investors are also much worse off than before Trump’s Liberation Day blitz. 

Yesterday, London’s FTSE 100 gained 3.04 per cent, France’s CAC 40 shot up 3.83 per cent and Germany’s DAX rose by 4.53 per cent. 

But the bounce-back has not repaired all the damage inflicted in the past few days. 

While the FTSE 100 was up £57.6billion yesterday, it is still down £171.7billion, or eight per cent, since the onslaught began on April 2.