UK in 'age of insecurity', Starmer warns as he vows not to be 'cowed' by Trump tariffs - with markets still plummeting
7 April 2025, 15:27
Keir Starmer has said the UK is in an "age of insecurity" but vowed "not to be cowed" by Donald Trump's tariffs.
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Starmer said "the global economic consequences" from the tariffs could be "profound", as he also announced plans to water down electric vehicle targets.
The tariffs have sent global markets into chaos, with sell-offs continuing on Monday in Asia, Europe and the US.
The FTSE 100, the UK's benchmark stock index, fell 2.64% as it opened.
The value of US stocks also dropped sharply, minutes after markets opened in Wall Street on Monday. The S&P 500 index, which tracks the country's leading listed companies, was tumbling by about 200 points, or 4%, shortly after opening. The Dow Jones index was down about 3.7%, and Nasdaq fell around 4.4%.
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Starmer and Rachel Reeves were speaking at Jaguar Land Rover. One of the tariffs that Trump announced was a 25% import tax on cars. Starmer said he thought EV targets were "a good thing".
"They’re good for the climate, good for business certainty and investment, good for British manufacturing," Starmer said.
“But I accept that those targets have to work for British manufacturers and I don’t want British firms like this one put in a position where you have to pay a hefty fine or buy credits from foreign EV companies.
“So today we’re going to introduce much more flexibility into EV mandates, we’re going to help companies based in Britain reach the targets in a way that supports growth. We’re going to cut down any fines which I don’t want or expect to see by 20%, and any money that’s raised will be invested directly back into support for the British car industry.
He praised the “engineering brilliance” of Jaguar Land Rover.
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“That is our industrial heritage but also in my strongly-held view it is our industrial future, not just our heritage.
“These are challenging times but we have chosen to come here because we are going to back you to the hilt... [This] is a statement of intent about how important this is for you, for us, for the country.”
Starmer also pledged to slash the number of days it takes to set up a clinical trial from "over 250" to 150.
And the PM announced new investment of "up to £600 million" in new health data research services.
Reeves, the Chancellor, insisted: "There are huge opportunities despite the challenges that we face for the future,” she said.
“When it comes to high-quality design and engineering, you, all of you, are gold standard. The skill, the expertise that Keir and I have seen here today demonstrate why that is and why every year you produce hundreds of thousands of cars for export right across the globe, from China to Europe to India and of course the United States of America.
“Your success and those of companies like you is integral to the success of our whole British economy. But as I set out in the Spring Statement less than two weeks ago, the world is changing. We can see that before our eyes.
“The global economy has become more uncertain, and new trade barriers are impacting global trade.”
She added: "We will still feel the overall effects of tariffs elsewhere and particularly in the auto sector.
“What I want all of you to know is that this Government, this Prime Minister and with me as Chancellor, we have your back. The choice that we now have is how to respond to that changed world.
“We could step back on rely on old assumptions about how the world works, or we can step up, together, and accept that the global landscape has changed and so we must change with it.
“The approach we are taking is cool-headed, it is pragmatic and it is guided by the national interest. Seeking to strike deals with our trading partners around the world, including with the United States, and we will continue to make the case for free, fair and open trade.
“Because that is how we will continue to deliver prosperity and security for working people here at Jaguar Land Rover and right across our country. And we must do more. We will as a Government, as a country, go further and faster to capitalise on new opportunities in this changing world, to improve our domestic competitiveness so we are less exposed to global shocks, and to secure Britain’s future in the long term.
“That means doubling down on economic stability, the basic condition to secure economic growth. It is why the Government has stuck to its fiscal rules in the Spring Statement, even when they were tested, demonstrating that when Britain talks about economic stability we really mean it. And stability matters even more for working people and for business in an uncertain world.”
Earlier, Mr Trump claimed other countries had been "taking advantage of the Good OL' USA!" in a post on Truth Social, his social media platform.
He wrote: "Our past 'leaders' are to blame for allowing this, and so much else, to happen to our Country. MAKE AMERICA GREAT AGAIN!"
The US leader has insisted his tariffs are necessary to rebalance global trade and rebuild domestic manufacturing. He has singled out China as "the biggest abuser of them all" and criticised Beijing for increasing its own tariffs in retaliation.
The Republican President also called on the US Federal Reserve to lower interest rates.
On Friday, the chair of the US central bank, Jerome Powell, warned that the tariffs could increase inflation, and added "there's a lot of waiting and seeing going on, including by us", before any decisions would be made.
Mr Trump spent the weekend in Florida, arriving on Thursday night to attend a Saudi-funded tournament at his Miami golf course. He stayed at Mar-a-Lago, his private club in Palm Beach, and played golf at two of his properties nearby.
On Sunday, he posted a video of himself hitting a drive, and he told reporters aboard Air Force One that evening that he won a club championship.
"It's good to win," Mr Trump said. "You heard I won, right?"
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He also said that he would not back down from his tariffs despite the turmoil in the global markets.
"Sometimes you have to take medicine to fix something," Mr Trump said.
Goldman Sachs issued a new forecast saying a recession has become more likely even if Mr Trump backtracks from his tariffs.
The financial firm said economic growth would slow dramatically "following a sharp tightening in financial conditions, foreign consumer boycotts, and a continued spike in policy uncertainty that is likely to depress capital spending by more than we had previously assumed".
On Monday, the US President is scheduled to welcome the Los Angeles Dodgers to the White House to celebrate their World Series victory. He is also meeting with Israeli Prime Minister Benjamin Netanyahu, and they are expected to hold a joint press conference later.
Mr Trump has strived for a united front after the chaotic infighting of his first term. However, the economic turbulence has exposed some fractures within his disparate coalition of supporters.
Bill Ackman, a hedge fund manager, lashed out at Commerce Secretary Howard Lutnick on Sunday as "indifferent to the stock market and the economy crashing".
He said Cantor Fitzgerald, the financial firm led by Mr Lutnick before he joined the Trump administration, stood to profit because of bond investments.
On Monday, Mr Ackman apologised for his criticism but reiterated his concerns about Mr Trump's tariffs.
"I am just frustrated watching what I believe to be a major policy error occur after our country and the president have been making huge economic progress that is now at risk due to the tariffs," he wrote on X.
Top White House economic adviser Kevin Hassett told Fox News Channel that Mr Ackman should "ease off the rhetoric a little bit".
He insisted that other countries, not the United States, are "going to bear the brunt of the tariffs".
Billionaire Elon Musk, a top adviser to Mr Trump on overhauling the federal government, expressed scepticism about tariffs over the weekend. Mr Musk has said that tariffs would drive up costs for Tesla, his electric carmaker.
He said in a video conference with Italian politicians: "I hope it is agreed that both Europe and the United States should move ideally in my view to a zero tariff situation, effectively creating a free trade zone between Europe and North America."
Mr Musk added: "That certainly has been my advice to the President."
