Starmer admits UK will face Trump tariffs this week as US president sparks global recession fears: Live

The construction sector is bracing for a potential crisis as new trade tariffs threaten to drive up material costs and put further strain on housebuilding targets.

Amit Oberoi, Group CEO of the Considerate Constructors Scheme, warned that “any uncertainty in the supply chain presents difficulty for the construction sector and for the government’s 1.5 million homes target, a goal which, for multiple reasons, is already a big ask.”

The British steel industry is particularly vulnerable, with tariffs expected to disrupt exports to the US. “Although decreased demand from the US might lead to lower prices in the short term, in the longer term it will likely mean reduced domestic supply and fewer domestic steel producers, causing costs to soar,” Mr Oberoi explained.

The construction sector has already been grappling with soaring material prices. The pandemic disrupted supply chains, pushing costs up, while inflation added further pressure.

Building costs are projected to rise by 15 per cent over the next five years, and any additional strain could be “catastrophic for housebuilders,” Mr Oberoi warned.

The European economy is bracing for a hit from Donald Trump’s proposed tariffs, with analysts warning of a significant knock to GDP and potential job losses.

Ruben Dewitte, economist at ING, has calculated that the tariffs could shave 0.33 per cent off EU GDP in the short term.

While that may seem minor, he said, it comes at a time when many economies have been stagnating.

“The cost will be considerable,” he warned, adding that the long-term impact could reach 0.87 per cent if tariffs rise to 25 per cent, leading to decreased investment and further economic strain.

The United States is the EU’s largest trade partner, accounting for 20 per cent of extra-EU exports—worth €504 billion in 2023, Mr Dewitte said.

Germany is the most exposed country, with exports to the US totalling €158 billion. Meanwhile, Ireland faces the highest GDP exposure at 9.7 per cent, largely due to its pharmaceutical and tech exports.

On average, EU exports to the US consist of 77 per cent domestic-added value, meaning the tariffs will hit local economies hard.

Mr Dewitte warned that EU exports to the US could drop by 19 per cent, with additional fallout including weakened investor confidence and financial market disruptions.

The UK and Finland are “tied hip-to-hip” on Nato, Finnish president Alexander Stubb has said after meeting Sir Keir Starmer in Downing Street.

A red carpet was rolled out on the steps of No 10 on Monday afternoon for the Finnish president, who also met US President Donald Trump on Saturday.

Addressing media inside No 10, Mr Stubb, who said much of his family had dual Finland-UK nationality, added that “Keir and I hit it off, in the beginning, straight off the bat”.

The Finnish president added: “I’m really glad to see the leadership the UK is showing, not least in the war in Ukraine. And in many ways, in my mind, the UK is back, back in the game.

“We’ve had an interesting week in many ways, last week in Paris with the Coalition of the Willing, many phone calls with Zelensky, myself meeting President Trump on Saturday, and we continue the conversations today and try to find solutions together.

“But I think Finland and the UK are tied hip-to-hip and in so many places, including Nato and of course, JEF (Joint Expeditionary Force) which you guys founded.”

Sir Keir said Mr Stubb was “welcomed as a leader and a friend”, adding that the UK and Finland had a “great relationship”.

The Prime Minister added: “I know that on all the important issues, whether it’s Ukraine or other global issues, our thinking is very closely aligned.

“And certainly I think the closer we can work together on some of these challenges, the better.”

Andrew Griffith, shadow trade secretary, said: “This news is potentially a hammer blow not just to British businesses and workers but to his own Chancellor whose creative accounting at the emergency budget fails to include the impact of tariffs.

“Labour claims talks with the US are going ‘well’. But, if this is what well looks like, I wouldn’t like to see what the opposite looks like. The Prime Minister has so far failed to come up with the goods, he needs to rekindle our US trade deal.

“This is just further proof that, when Labour negotiates, Britain loses.”

The Independent’s data correspondent Alicja Hagopian reports:

Many economists believe that trade tensions sparked by Mr Trump will slow economic growth around the world.

The Organisation for Economic Co-operation and Development (OECD) said earlier this month that US trade policy would be a “drag on global activity” and hit living standards around the world.

“Overall, consumers face much of the burden of higher tariffs,” the OECD said in its economic outlook report, with real disposable incomes estimated to decline by 1,600 US dollars (£1,237) per household in the US.

In terms of the UK impact, experts say there is a great amount of uncertainty about how tariffs will filter through to households and businesses, especially if the country avoids steep penalties.

Economists at the Bank of England said the effect on inflation in the UK would depend on how other countries respond with their own trade policies, and how foreign exchange rates are affected.

Economist Swati Dhingra, a member of the Bank’s Monetary Policy Committee, has said the UK is sensitive to changing import prices.

But she suggested that the inflation impact could be “less than feared” because the main goods that the US imports from the UK, including refined oil, were unlikely to see cost increases on account of tariffs.

The Bank, which sets UK interest rates, said it was a “rapidly evolving situation” that it was monitoring closely.

Sir Keir Starmer is facing an “impossible task” in deciding whether to retaliate to Trump’s looming tariffs, an expert has warned.

Simon Finkelstein, director of geopolitics at the Brunswick Group said “It would be foolish to do so, however, politically it might become untenable not to do so.”

“Fundamentally he’s got an impossible task because the people who work for the President clearly don’t know what he’s going to do on Wednesday either,” he told Times Radio.

“But I think the thing [Starmer] has got to do is continue on the same strategy, which is attempt to negotiate some sort of future deal with the US, whether that looks like something sort of wider range or more limited on technology to mitigate the worst aspects of the tariffs.”

“The UK government has to at least try,” Mr Finkelstein added.

Financial markets are facing a wave of uncertainty as investors brace for the fallout from Donald Trump’s latest tariff threats.

London-listed stocks are expected to suffer, with the FTSE 100 set for a turbulent start to the week.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, warned that “the last day of March is spring-loaded with uncertainty” as concerns over sweeping tariffs send markets into turmoil.

Asian indices have already seen sharp declines after hopes for a more targeted approach to duties faded.

Over the weekend, Mr Trump signalled that broad new tariffs would take effect on Wednesday —dubbed ‘Liberation Day’ — raising fears of a global trade war.

“He appears determined to target countries across a range of sectors,” Ms Streeter said, but warned that reviving domestic industries would take years and lead to higher costs in the meantime.

The uncertainty has fuelled recession fears in the US, further unsettling markets.

With inflation already running hot, expectations of US interest rate cuts are fading.

Meanwhile, gold has surged above $3,100 as investors seek safe havens.

“The gold rush has sparked a rush of interest from individual investors,” Ms Streeter noted, as buyers snap up gold amid fears of further economic instability.