Carmaker shares fall after Trump’s 25% tariff; poorer families set to be £500 poorer after spring statement – business live
Key events
Germany’s economy minister Robert Habeck has called for the European Union to deliver a firm response to Donald Trump’s new 25% tariff on imported cars.
In a statement, Habeck says:
“What counts now is to have a firm response to these tariffs from the EU. It needs to be clear that we will not take this lying down.”
Carmaker shares slide after Trump tariff announcement
Shares in Asia-Pacific car companies have fallen after Donald Trump announced plans to impose sweeping 25% tariffs on cars from overseas last night.
The latest eruption in the Trump Trade Wars have hit investor confidence, and angered US trading partners around the world.
In Japan, shares in Toyota Motor have lost 2.04%, Honda Motor fell fell 2.48% while Nissan Motor slipped 1.68% – which all helped to pull the Nikkei index down 0.6% today.
In South Korea, Hyundai Motor’s shares have fallen over 4% – just days after it tried to placate Trump by announcing a $21bn investment in the US.
The European Commission president, Ursula von der Leyen, has described Trump’s move as “bad for businesses, worse for consumers”.
Trump has also threatened further tariffs if the EU worked with Canada “in order to do economic harm to the USA”, which may fuel fears of a tit-for-tat trade conflict that would hurt the global economy.
Writing on his own social media platform, Truth Social, he said if they did so, “large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!”
Introduction: Lower-income families set to become £500 a year poorer
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
As the dust settles after yesterday’s spring statement, analysis shows that lower-income households are set to become £500 a year poorer over the current parliament.
The Resolution Foundation has been crunching the data since Rachel Reeves updated us on the nation’s finances, and concluded that poorer households will be most affected by the various tax and benefit changes in this Parliament.
Over the next five years, the average income across the poorest half of working age households is projected to decline by three per cent, or £500. That has only happened before during the early 1990s recession (1989 to 1994-95) and the financial crisis (2007-08 to 2012-13).
Ruth Curtice, Chief Executive of the Resolution Foundation, says:
“High debt servicing costs, weak tax receipts, and the need to reassure jittery markets, meant the Chancellor had to announce tax rises or spending cuts in her Spring Statement.
“She chose to focus the bulk of her consolidation on welfare cuts. These cuts have been justified on the basis of getting people into work, but it is questionable how much of a jobs boost they’ll deliver. After all, the bulk of the cuts are to disability benefits which aren’t related to work, and the cuts take effect from 2026, three years before the Government’s employment support programme kicks into gear.
“While the OBR’s outlook for growth today got gloomier, it is far more optimistic about Britain’s medium-term economic prospects. The Chancellor will hope that reality catches up with the OBR, rather than the OBR falling back to reality, otherwise more tough choices await.
“The outlook for living standards remains bleak. Britain’s poor economic performance, combined with policies that bear down hardest on those on modest incomes, mean that 10 million working-age households across the bottom half of the income distribution are on track to get £500 a year poorer over the course of the Parliament.”
Yesterday the chancellor announced welfare cuts of £4.8bn, with official figures showing that three million households could lose £1,720 a year in benefits. That could yet lead to a rebellion among Labour MPs when it comes to a vote…
…especially as Resolution Foundation have calculated that the £4.8bn welfare savings are actually built on £8.1bn worth of cuts.
They explain:
The full scale of welfare cuts are far greater than the net £4.8 billion savings. After accounting for the £1.9 billion boost to the standard rate of Universal Credit (UC), and the ‘gain’ from not going ahead with scored-but-never-implemented changes to the Work Capability Assessment, cuts to ill-health, disability and carer’s benefits rise to £8.1 billion in 2029-30, and will continue to grow over time.
Economists are also concerned that Reeves has not left herself very much headroom to hit her fiscal targets – any slippage could force her to consider tax rises.
The risks to the economy were amply demonstated by Donald Trump last night, as he announced new 25% tariffs on cars from overseas.
The agenda
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8.30am GMT: Bank of England policymaker Swati Dhingra speaks on a panel in South Africa
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9am GMT: Resolution Foundation event assessing the Spring Statement
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10.30am GMT: Institute for Fiscal Studies press conference on the Spring Statement
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12.30pm GMT: Updated US Q4 GDP report.
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12.30pm GMT US weekly jobless claims
