President Donald Trump has reignited global trade tensions after announcing a new wave of tariffs on European exports. Companies warn the move could disrupt supply chains, weaken confidence and drive up inflation in the United States.
Under the new plan, a flat 10 percent tariff will be imposed on “all or any goods” exported to the United States from Britain, Denmark and other European countries starting February 1. Trump has also threatened to increase those tariffs to 25 percent starting June 1 unless negotiations for the U.S. purchase of Greenland are successful – a demand that has already been firmly rejected by Copenhagen and its allies.
Market analysts say the policy represents a drastic escalation of Trump’s confrontational trade strategy and comes at a sensitive time for the British economy, which has only just returned to modest growth.
Susannah Streeter, chief investment strategist at Wealth Club, said the move had created new uncertainty in global markets. She described the announcement as “migraine-inducing” for both politicians and businesses who had already endured months of tariff politics.
“Just when the tariff storm seemed to be abating, President Trump has unleashed new economic chaos,” Streeter said. “This is his modus operandi: triggering uncertainty and the threat of harsher measures to force nations to give in to his demands.”
While there may be some relief that talks of military action have been scaled back, Streeter warned that the tariffs themselves are likely to remain in place. Given the deadlock over Greenland’s future, she said the 10 percent levy could remain in place for some time, with the threat of an increase to 25 percent in June “very likely.”
For exporters selling to the US, the impact is significant. Many companies were already struggling to meet the costs of existing tariffs, leaving little room to mitigate further increases. As a result, higher tariffs are likely to be passed on to American customers through higher prices.
“This poses the risk of lower demand and weaker sales for exporters,” Streeter said. “Some U.S. importers may rush to bring forward their orders before June, leading to a short-term increase, but in the longer term they will likely look elsewhere for cheaper suppliers.”
The knock-on effects are already worrying British companies, whose confidence has fallen sharply in recent months. Although recent data suggests the economy is beginning to stabilize, analysts fear renewed trade disruptions could quickly undermine that progress.
The latest move is also expected to increase inflationary pressures in the US. Higher prices are likely for a wide range of goods, from cars and chemicals to food products like olive oil, as well as airplanes and medical equipment. This comes at a time when many U.S. households are already feeling the strain of rising living costs.
Streeter warned that the tariffs could further escalate tensions between the White House and the Federal Reserve as policymakers weigh the inflationary impact of trade barriers against pressure from Trump to cut interest rates more aggressively.
“Policymakers are likely to be even more cautious,” she said. “Rising tariffs make it harder to justify faster rate cuts.”
For the UK, this episode is expected to increase calls for trade diversification. Many companies are already exploring new markets to reduce their dependence on the USA. This reflects a strategy by China, which has boosted exports by establishing alternative trading relationships. The latest threat of tariffs is also likely to reignite debate about closer trade ties with the EU to offset the damage from US political volatility.
