UPDATE: |Rachel Reeves issues bleak message following Trump tariff spree News

The Chancellor assured families and businesses that the government ‘have your backs’

Rachel Reeves has issued a foreboding message to MPs in the House of Commons in response to US President Donald Trump’s rollout of tariffs on foreign countries.

The Chancellor, who was speaking ahead of Treasury questions earlier on Tuesday, warned MPs that US tariffs will “continue to have huge implications” on Britain’s economy.

Ms Reeves, who just two weeks ago announced a series of welfare cuts in a bid to boost the fiscal headroom, has indicated that the impacts of the US trade overhaul will continue to be felt on this side of the Atlantic for some time to come.

Last week, President Trump announced a 10% tariff on US imports of British goods, along with a 25% tariff on cars and separate levies for steel and aluminium.

The so-called ‘liberation day’ tariffs on foreign goods resulted in heavy losses in the global stock market, with London’s FTSE 100 plunging more than 5% within the first 10 minutes of trading on Monday.

The next stage of Mr Trump’s tariff programme comes into force in the early hours of Wednesday, with import taxes at 20% for goods from European Union nations and 24% from Japan.

The UK Government is striving to secure a trade deal with the White House in the hope of easing the tariffs, and Prime Minister Starmer has called for a “calm and collected response” in order to avoid entering into a trade war with the US.

Speaking to MPs earlier, Chancellor of the Exchequer, Rachel Reeves, said: “The United States’ decision to impose tariffs has had and will continue to have huge implications for the world economy.

“These implications have been reflected in the reaction that we’ve seen in global markets in recent days, which the financial authorities have of course been monitoring closely.

She continued: “This morning I spoke to the governor of the Bank of England, who has confirmed that markets are functioning effectively and that our banking system is resilient.

“I know too that this is an anxious time for families who are worried about the cost of living – we have your backs.

“And British businesses who are worried about what a changing world will mean for them – we have your backs too,” Ms Reeves added.

“This Government is clear-eyed that our response to global change cannot not be to watch and wait, but instead to act decisively, to take the right decisions that are in our national interest, protecting working people.

“All of the decisions that we make as a Government will be underpinned by the stability of our non-negotiable fiscal rules.

“A trade war is in nobody’s interest, it is why we must remain pragmatic, cool-headed and pursue the best deal with the United States that is in our national interest. This remains our priority.”

Ms Reeves went on to say the UK is working with its international allies to “reduce the barriers to trade right across the world”, adding: “Over recent days I have held discussions with my counterparts in Canada, Australia, Ireland, France, Spain, and with the European Commission.

“We will pursue these talks in earnest. Tomorrow I will hold talks with the Indian government as part of our two nations’ economic and financial dialogue as we seek to secure a new trade deal with India.”

In a separate message to families and businesses, the Chancellor said “we have your backs” and promised that “all of the decisions” made by the Government will be “underpinned by the stability of our non-negotiable” fiscal rules – which rule out borrowing to fund day-to-day spending.