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Tariffs imposed by President-elect Donald Trump will lower UK economic growth and drive up prices, a leading thinktank warned ahead of the US election.
Donald Trump declared victory early on Wednesday morning (6/11) after securing 265 electoral votes and several key swing states.
The former president took the battleground states of North Carolina and Georgia and picked up the most prized possession of all the swing states – Pennsylvania – which was tipped to be among the closest in the opinion polls.
Trump has said he would impose a 10 per cent or 20 per cent tariff on all imports across the board in order to cut the amount of income tax Americans pay or do away with it altogether.
He has also floated tacking on a specifically high China rate of between 60 per cent and 100 per cent.
If he pressed ahead with the plans, UK growth could be halved while prices on consumer goods are likely to rise significantly, according to analysis by The National Institute of Economic and Social Research (NIESR).
“The UK is a small, open economy and would be one of the countries most affected,” NIESR economist Ahmet Kaya said.
The body has calculated that over two years the UK inflation rate would be 3-4 points higher while interest rates would be 2-3 points higher.
Kaya said the impact of the Trump measures would be more severe if the affected countries imposed tit-for-tat tariffs of their own as part of a global trade war.
