Trump's tariffs are a 'global wrecking ball' – and the first official damage reports are in
26 April 2025, 13:08
In a recent television interview, I described the new US tariffs as a "global wrecking ball."
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Some may think that was an overstatement. Sadly, as recent news has revealed, it was not.
The sweeping tariffs imposed by the United States - including a 10 per cent blanket levy on almost all imports and punitive duties of up to 145 per cent on Chinese goods - are not just a spat between superpowers.
They represent a profound destabilisation of the global economy. And for Britain, already navigating the choppy waters of a post-Brexit and post-Covid world, they pose a very real threat that we must address with urgency, creativity and leadership.
The International Monetary Fund's (IMF) latest forecast makes grim reading: global growth downgraded to 2.8 per cent, world trade growth slashed almost in half, and the spectre of rising inflation stalking every major economy.
Ironically, the US is going to be even more negatively affected, with shrinking GDP growth and - I believe - the potential to head into recession. Just a small reduction in tourism alone is likely to lose the US a trillion dollars in growth in my view.
These are not abstract numbers. They mean businesses struggling to export. They mean price rises for ordinary families. They mean lost jobs and shrinking opportunities for millions.
Of course, the US is entitled to protect its national interests. No country can be blamed for putting its own people first, but any protection needs to be applied with acute commercial intellect and not applied as a blunt instrument of economic policy, otherwise everyone suffers and, in the long run, the instigator will pay the bigger price.
Tariffs on this scale do not create prosperity; they destroy it. They do not correct imbalances; they create new ones. And while the intention may be to weaken China, the unintended consequences will ripple far beyond Beijing. Europe will feel it. Britain will feel it. Emerging markets - often the most vulnerable - will likely feel it most of all.
Looking at China specifically, they may even prosper through an improvement in their global relationships, with other nations viewing them more sympathetically.
There is a worrying arrogance in the belief that a single country can weaponize global trade against even its closest allies without themselves reaping disastrous consequences.
Tariffs on this scale unleash uncertainty. Uncertainty crushes investment. And when investment dries up, innovation falters, growth stalls, and societies can become poorer and more divided.
As someone who has built successful businesses and created jobs, I know that success depends on stability, rules-based systems, and having the confidence to plan for the future.
But, more than anything else, such big decision need to be based on commercial intellect. These tariffs have thrown sand into the gears of the entire system, and the IMF's forecast backs this up.
For Britain, the challenge is acute. We are an open trading nation. Our economic model relies on being a hub for commerce, services, and global collaboration. If trade wars escalate, we cannot sit back and assume we will be spared.
As we await with great anticipation the outcome of trade talks with the US, with reportedly a draft deal 'ready to sign,' our government must do everything they can to defend British interests.
Already, the IMF has downgraded UK growth prospects to 1.1 per cent for 2025, which is 0.5 per cent lower than it forecast only in January. We must not be complacent.
Instead, Britain must lead by example. We should redouble our commitment to open, fair, rules-based trade. We should work with allies to resist the drift towards protectionism. And we should invest heavily in the sectors that can thrive in a connected world: green technologies, advanced manufacturing, life sciences, digital innovation.
Above all, our political leaders must show clarity and courage. We must articulate a positive vision of Britain’s place in the world: confident, outward-looking, future-focused. We must invest in our competitiveness, not through tariffs and barriers, but through education, infrastructure, skills and world-class industries. That is how we secure prosperity for the long term.
I urge policymakers in Westminster and business leaders across the country to treat the IMF’s warnings with the seriousness they deserve. This is not the time for complacency. It is the time for action: thoughtful, strategic, cooperative action.
The global economy is interconnected. One nation’s tariffs are, potentially, another nation’s recession. We should not let the wrecking ball swing freely while hoping it won't hit us.
We should also not rely solely on the possible trade deal with the US to help shield Britain completely; the devil will be very much in the detail of any draft deal with the US, specifically with respect to what industry sectors are included and those which are not.
For example, the pharmaceutical industry is reportedly not currently included within the draft text, and we must not accept any watering down of our food standards. We can but wonder what other surprises are lurking in the small print.
While Britain negotiates for its own deal, defending its own interests, we must not forget our leadership role within the broader international community.
We need a global economy that provides stability for trading between nations, encouraging international partnerships where possible, and creating security for hard working people who have already had much to endure.
The future belongs to those who build, not those who break. Britain must be a builder.
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John Caudwell is a Business leader, philanthropist and the founder of Phones 4U.
Follow @JohnDCaudwell on X, @johncaudwell on Instagram.
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