DONALD Trump’s tariffs have wiped billions of pounds from Scottish pension funds, it has been reported.
The Sunday Mail has said an estimated £12 billion hit was taken by Scots pension funds as the impact of the US President’s emerging trade war took hold across the globe.
The UK was originally faced with a 10% levy, while others like the EU faced a 20% tariff.
Trump imposed a 90-day pause on reciprocal tariffs, which means traders importing to America from across the world now face the 10% rate – apart from China, which has been singled out for massive, prohibitive levies.
In response, Beijing hiked tariffs on American goods to 125% on Friday to match those imposed by Washington.
The tariffs caused fluctuations in global stocks as countries reeled from their impact.
And now, it has been reported that Scottish pensions were one of the casualties.
A typical mid-career worker in the UK saw a drop of £5968 to their pension pot after Trump’s tariff announcement, the Sunday Mail reports, attributing the findings to ONS data.
They also said there was an estimated 7% hit to a typical pension investment fund.
With around 1.94 million Scots workers thought to be part of a workplace pension scheme, this could mean as much as £11.6bn being wiped from retirement savings.
Tom Selby, director of public policy at investment firm AJ Bell, said that every workplace pension saver is different.
However, he warned the impact on Scots pension pots from Trump’s policy would “certainly be in the billions”.
“It’s very hard to avoid short-term downward movements when the largest economy in the world, which is connected with all other economies, does something like this,” he told the newspaper.
Those who were looking to retire in the coming years were more likely to feel the impact, Selby explained.
“It’s worth remembering that most people stay invested when they access their pension, so retirement is less of a fixed point in time than it used to be,” he said.
“But it’s definitely worrying if you’ve kept a high equity exposure and you’re planning to buy an annuity shortly, which is why people planning to do that shouldn’t be fully invested in equities.
“Some may find themselves in this position, in which case falls on the value of their fund leaves them in a potentially difficult position.”
Selby added: “Either hang tight and hope markets recover or potentially delay retirement.”
Scottish LibDem leader Alex Cole-Hamilton told the newspaper Trump is an “economic wrecking ball” who will leave both “Americans and Brits worse off”.
Chancellor Rachel Reeves (above) insisted the UK would try to secure “the best deal possible” with the US and that negotiations with the Americans are ongoing.
Speaking at Downing Street, she told reporters: “We continue to engage with our counterparts in the United States, and of course we want to secure the best deal possible for British jobs and British industry. And we are absolutely … resolved to do everything we can.
“But, at the same time, we also want to improve trading relations with other countries around the world.”
Elsewhere, Sarah Breeden, a deputy governor of the Bank of England, told The Guardian that UK growth would be hit by “the most significant change in trade policy in a century”.
Imports of cars, steel, and aluminium to America are all still subject to a 25% tariff.
