Donald Trump is preparing to announce significant new tariffs on Wednesday that could derail economic plans made by the Labour Government.
Sir Keir Starmer and Rachel Reeves faced questions from MPs on Wednesday about how they will respond to the US president’s expected speech.
More than 25,000 UK car manufacturing jobs are said to be at risk if Trump proceeds with his plans.
British ministers are still hopeful of securing a deal with the US that would provide some protection from the import taxes. However, Sir Keir acknowledged that "the likelihood is there will be tariffs" on UK exports.
Trump has already hailed the occasion as “Liberation Day” and is set to issue dollar-for-dollar tariffs to all foreign countries.
“I call it liberation day,” said Trump in February. He added: “I call April 2 liberation day.
“In a sense, it’s the rebirth of a country, it’s the liberation of America.”
Here is how to follow the action and what to look out for.
What time is Donald Trump's ‘Liberation Day’ press conference?
The US president is expected to unveil sweeping ‘Liberation Day’ tariffs at an event at the White House around 9pm UK time.
What is he likely to announce?
Trump is expected to grandstand on the occasion with an address to his full Cabinet.
He is set to announce this as the beginning of a “golden age” of American wealth and independence. While he has argued that it is “only fair” and an effort to level the playing field, it is believed the tariffs could negatively impact much of the world.
Prices are set to rise in the US with inflation soaring and the stock market plunging.
“It’s gonna be reciprocal,” Trump bellowed to reporters while onboard a flight.
“In other words, whatever they are charging, we’re charging, very simple.”
However, Trump has said that this will lead to the tariffs charged to the US being lowered.
“The numbers would be lower than what they have been charging us and in some cases substantially lower,” he said in another meeting.
It means that it is hard to predict what a possible reciprocal tariff will look like.
American consumers will likely suffer in the short term with higher prices.
However, this has led some analysts to consider it a negotiating tactic by Trump.
“I don’t know why nobody did this a long time ago,” he has said.
What could be the impact on Britain?
Before Trump's announcement, Sir Keir faced MPs at Prime Minister's Questions. The Treasury Committee will then grill the chancellor on last week's spring statement, with Ms Reeves set to face questions about what the tariffs will mean for her plans.
It is unclear what Trump will announce on Wednesday, but his administration views the application of VAT rate as discriminating against US goods. As such, Trump could respond with a 20 per cent tariff on imports from the UK.
Trump has already announced that a 25 per cent import tax will be introduced on all cars imported to the US, affecting the UK's automotive industry.
Some 16.9 per cent of UK car exports were to the US last year, representing more than 101,000 units worth £7.6 billion.
Tariffs on steel and aluminium imports, including from British firms, are already in place.
