UK position explained as Trump announces 90-day tariff pause for most countries

Donald Trump's 'Liberation Day' tariffs certainly haven't achieved their intended purpose in the week since their announcement, with the US President seemingly kickstarting a trade war with China.

The 78-year-old announced tariffs on nearly every country in the world earlier this month, including an island entirely inhabited by seals and penguins.

With tech CEOs losing billions quicker than Trump can even say tariff, the president may well have been forced to re-think, as he confirmed yesterday that he would be introducing a 90-day pause on tariffs for most countries across the world.

Why has Trump imposed tariffs and what do they mean?

For those of you still unsure, a tariff is a kind of tax an importer pays on things brought in from other countries. So, if someone in the US wanted to buy something from the UK, then they'll have to pay the US government 10 per cent (unless it's a car, in which case it's 25 percent) of the item's value. Items such as steel and aluminium have also been taxed at 25 per cent.

Trump's trade war with China is ongoing (Kevin Dietsch/Getty Images)

Other countries have had far harsher tariffs introduced, notably China, who the president had already imposed a 20 per cent tariff on before his Liberation Day antics.

This is likely to see costs increase for the average consumer, as businesses are unlikely to completely absorb the increased fees that would go to the US government, and will therefore drive prices up instead.

So, the next time you buy an iPhone, which has likely been manufactured in China, they will probably pay an eye-watering fee.

Why did Trump introduce the 90-day pause on tariffs?

Amid the outrage from other countries about the tariffs, it seems as if some have been working hard to find a solution that works for both parties, and Trump has confirmed that tariffs will be paused for those above 10 per cent.

However, China retaliated to the US tariffs by introducing their own, and Trump confirmed that he would once again be raising their tariffs, now to a staggering 125 per cent.

Posting on Truth Social, he wrote: "Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125 per cent, effective immediately.

"At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable."

What do the paused tariffs mean for the UK?

Starmer will be hoping to see the tariffs removed (Eddie Mulholland-WPA Pool/Getty Images)

Well, not much, to tell you the truth. Since the UK is already at the minimum 10 per cent tariff, and Trump has only paused tariffs for those beyond that 10 per cent, it seems as if nothing will change for the time being.

Sir Keir Starmer is no doubt in ongoing conversations trying to make the most of our special relationship, to ensure that we don't face any tariffs at all. The current tariffs are likely to impact your pension, while a number of UK industries are likely to be heavily hit.