KEIR PROMISE
Keir rules out sweeping tax hikes to offset Trump’s tariff meltdown… but more painful cuts & borrowing hikes loom
The PM promised not to increase the three main revenue-raisers of Income Tax, National Insurance or VAT
SIR Keir Starmer today ruled out tax hikes to offset the economic meltdown triggered by Donald Trump’s tariffs - but opened the door to more borrowing and spending cuts.
The PM promised not to increase the three main revenue-raisers of Income Tax, National Insurance or VAT - insisting: “The first lever can’t be more taxes.”
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Stock markets plunged today in response to fears the US President will spark a global trade war with his blizzard of import levies.
It also threatens to slash Britain’s growth outlook and wipe out the £10billion headroom accrued in the Spring Statement.
Economists have warned this could force Sir Keir to raise taxes, make deeper spending cuts or break his “fiscal rules” to increase borrowing.
Asked if he would stick with his pledge not to hike the three main taxes, the PM said: “We made that commitment in the manifesto and we were absolutely clear about going into the budget and the spring statement, and that is a commitment we've made, and a commitment that we will keep, because the first lever can't be more taxes.
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“My strong belief is that we have to driver our economy, create the conditions for investment, which we have done, there's been record investment coming into our economy.”
What is the FTSE and what does it say about Britain's economy?
The UK's biggest stock market index arrived in January 1984 at a time when traders still gave instructions in big mobile phones.
The FTSE 100 is made up of the 100 biggest publicly traded companies on the London Stock Exchange.
It is usually used as a measure of wealth and a guide of how the UK is doing relative to other stock markets.
Being included in it still has merit as it ranks the most valuable listed UK companies and it means firms get an instant lift from tracker funds that follow it.
He added in the West Midlands: “I'm still strongly of the view that the challenge we face is how to grow our economy, not just the sort tax and spend levers."
Labour’s election vow that surging GDP will fund their spending plans has been shot to pieces by a sluggish growth forecast.
Chancellor Rachel Reeves jacked up taxes by £40billion at the last Budget, including £20billion of National Insurance hikes on employers that kicked in this week.
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And Whitehall is bracing for spending cuts further to last month’s benefit squeeze.
Ms Reeves has previously said her fiscal rules not to borrow to fund day-to-day spending are "non-negotiable".
But quizzed today if they will be in place for the next five years, Sir Keir did not categorically commit to keeping them.
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Ms Reeves already bent her fiscal rules last year allowing her to borrow more to fund spending plans.
Downing Street is still holding out hope for an economic deal with the US that will do away with tariffs.
The PM’s spokesman today said negotiations were at an “advanced stage”.
But he has also launched a four-week consultation for business for imposing retaliatory measures on US goods heading here.
The PM held telephone calls on Sunday with European Commission President Ursula von der Leyen, German Chancellor Olaf Scholz and leader of the German Christian Democratic Union party Friedrich Merz.
After the call, Number 10 said: “Europe must rise to meet the moment and ensure the impact on hard-working people is minimised, while working closely with other countries to help maintain wider economic stability.”
Meanwhile, Treasury Minister Darren Jones said that globalisation has “come to an end” following the tariffs blitz imposed by the US.
He added that the UK needs to be “strong and resilient” emphasising the need to focus on the domestic economy.
When asked if the if the era of "cheap fast-fashion or cheap TVs" was over, he told the BBC: "Yeah, it's ended."
He added: "Globalisation, as we've known it for the last number of decades, has come to an end.”
But protesters took to the streets across America demonstrating against Trump’s time in office so far.
Campaigners who were forming part of the “Hands Off” movement led the nationwide show of anti-Trump feeling over isolationism.
A show of force was also felt in London, Paris and Berlin where firms will now feel the impact of imposing ‘liberation day’ tariffs.
One placard showed a penguin which refers to two remote Antarctic outposts – the Heard and McDonald Islands - populated by penguins and seals which has been hit by 10 per cent tariffs.
The territory lies nearly 2,500 miles south west of Australia.
It comes as multi-billionaire Elon Musk has suggested that there should be ZERO tariffs between America and the rest of Europe.
The Tesla boss distanced himself from the President’s appearance in the White House Rose Garden last Wednesday outlining his tariff rates for the world.
Musk said: “At the end of the day, I hope it’s 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.
“And more freedom for people to move between Europe and North America, if they wish,” Musk said, adding, “that has certainly been my advice to the president”.
Republican Senator Ted Cruz who represents Texas also feared a full-blown trade war if the tariffs stay in place.
Speaking to the Verdict podcast, he said that the levies “would destroy jobs here at home, and do real damage to the US economy”.
He added: “A hundred years ago, the US economy didn’t have the leverage to have the kind of impact we do now."
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The effects of the extra taxes on goods has seen fifty countries contact the US administration in a bid to negotiate a lower rate.
US national economic council director Kevin Hassett said: “More than 50 countries have reached out to the president to begin a negotiation.”
President Trump's Reciprocal Tariffs
President Trump unveiled his reciprocal tariff plan on countries worldwide on April 2, which he declared as "Liberation Day".
Reciprocal tariffs per country, which includes the 10% baseline fee:
- China: charges the US 67% tariffs, the US will counter with 34% reciprocal tariffs.
- European Union: charges the US 39% tariffs, the US will counter with 20% reciprocal tariffs.
- Vietnam: charges the US 90% tariffs, the US will counter with 46% reciprocal tariffs.
- Taiwan: charges the US 64% tariffs, the US will counter with 32% reciprocal tariffs.
- Japan: charges the US 46% tariffs, the US will counter with 24% reciprocal tariffs.
- India: charges the US 52% tariffs, the US will counter with 26% reciprocal tariffs.
- South Korea: charges the US 50% tariffs, the US will counter with 25% reciprocal tariffs.
- Thailand: charges the US 72% tariffs, the US will counter with 36% reciprocal tariffs.
- Switzerland: charges the US 61% tariffs, the US will counter with 31% reciprocal tariffs.
- Indonesia: charges the US 61% tariffs, the US will counter with 32% reciprocal tariffs.
- Malaysia: charges the US 47% tariffs, the US will counter with 24% reciprocal tariffs.
- Cambodia: charges the US 97% tariffs, the US will counter with 49% reciprocal tariffs.
- United Kingdom: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- South Africa: charges the US 60% tariffs, the US will counter with 30% reciprocal tariffs.
- Brazil: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Bangladesh: charges the US 74% tariffs, the US will counter with 37% reciprocal tariffs.
- Singapore: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Israel: charges the US 33% tariffs, the US will counter with 17% reciprocal tariffs.
- Philippines: charges the US 34% tariffs, the US will counter with 17% reciprocal tariffs.
- Chile: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Australia: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Pakistan: charges the US 58% tariffs, the US will counter with 29% reciprocal tariffs.
- Turkey: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Sri Lanka: charges the US 88% tariffs, the US will counter with 44% reciprocal tariffs.
- Colombia: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Peru: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Nicaragua: charges the US 36% tariffs, the US will counter with 18% reciprocal tariffs.
- Norway: charges the US 30% tariffs, the US will counter with 15% reciprocal tariffs.
- Costa Rica: charges the US 17% tariffs, the US will counter with 10% reciprocal tariffs.
- Jordan: charges the US 40% tariffs, the US will counter with 20% reciprocal tariffs.
- Dominican Republic: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- United Arab Emirates: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- New Zealand: charges the US 20% tariffs, the US will counter with 10% reciprocal tariffs.
- Argentina: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Ecuador: charges the US 12% tariffs, the US will counter with 10% reciprocal tariffs.
- Guatemala: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Honduras: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Myanmar (Burma): charges the US 88% tariffs, the US will counter with 44% reciprocal tariffs.
- Tunisia: charges the US 55% tariffs, the US will counter with 28% reciprocal tariffs.
- Kazakhstan: charges the US 54% tariffs, the US will counter with 27% reciprocal tariffs.
- Serbia: charges the US 74% tariffs, the US will counter with 37% reciprocal tariffs.
- Egypt: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Saudi Arabia: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- El Salvador: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Côte d'Ivoire: charges the US 41% tariffs, the US will counter with 21% reciprocal tariffs.
- Laos: charges the US 95% tariffs, the US will counter with 48% reciprocal tariffs.
- Botswana: charges the US 74% tariffs, the US will counter with 37% reciprocal tariffs.
- Trinidad and Tobago: charges the US 12% tariffs, the US will counter with 10% reciprocal tariffs.
- Morocco: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Moldova: charges the US 61% tariffs, the US will counter with 31% reciprocal tariffs.
- Angola: charges the US 63% tariffs, the US will counter with 32% reciprocal tariffs.
- Democratic Republic of the Congo: charges the US 22% tariffs, the US will counter with 11% reciprocal tariffs.
- Jamaica: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Mozambique: charges the US 31% tariffs, the US will counter with 16% reciprocal tariffs.
- Paraguay: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Zambia: charges the US 33% tariffs, the US will counter with 17% reciprocal tariffs.
- Lebanon: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Tanzania: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Iraq: charges the US 78% tariffs, the US will counter with 39% reciprocal tariffs.
- Georgia: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Senegal: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Azerbaijan:charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Cameroon: charges the US 22% tariffs, the US will counter with 11% reciprocal tariffs.
- Uganda: charges the US 20% tariffs, the US will counter with 10% reciprocal tariffs.
- Albania: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Armenia: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Nepal: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Sint Maarten: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Falkland Islands: charges the US 82% tariffs, the US will counter 41% with reciprocal tariffs.
- Gabon: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Kuwait: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Togo: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Suriname: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Belize: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Algeria: charges the US 59% tariffs, the US will counter with 30% reciprocal tariffs.
- Oman: charges the US 10& tariffs, the US will counter with 10% reciprocal tariffs.
- Uruguay: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Bahamas: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Lesotho: charges the US 99% tariffs, the US will counter with 55% reciprocal tariffs.
- Ukraine: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Bahrain: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Qatar: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Mauritius: charges the US 80% tariffs, the US will counter with 40% reciprocal tariffs.
- Fiji: charges the US 63% tariffs, the US will counter with 32% reciprocal tariffs.
- Iceland: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Kenya: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Liechtenstein: charges the US 73% tariffs, the US will counter with 37% reciprocal tariffs.
- Guyana: charges the US 76% tariffs, the US will counter with 38% reciprocal tariffs.
- Haiti: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Bosnia and Herzegovina: charges the US 70% tariffs, the US will counter with 35% reciprocal tariffs.
- Nigeria: charges the US 27% tariffs, the US will counter with 14% reciprocal tariffs.
- Namibia: charges the US 42% tariffs, the US will counter with 21% reciprocal tariffs.
- Brunei: charges the US 47% tariffs, the US will counter with 24% reciprocal tariffs.
- Bolivia: charges the US 20% tariffs, the US will counter with 10% reciprocal tariffs.
- Panama: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Venezuela: charges the US 29% tariffs, the US will counter with 15% reciprocal tariffs.
- North Macedonia: charges the US 65% tariffs, the US will counter 33% with reciprocal tariffs.
- Ethiopia: charges the US 10% tariffs, the US will counter with 10% reciprocal tariffs.
- Ghana: charges the US 17% tariffs, the US will counter with 10% reciprocal tariffs.
The full list was shared by The White House's rapid response team on X.