No 10 says Donald Trump’s tariffs not responsible for UK economy shrinking
Donald Trump’s tariffs are not responsible for the UK economy shrinking in January, Downing Street has said, in a position that appears to contradict the Chancellor’s reaction to the latest poor economic figures.
According to the latest set of gross domestic product (GDP) figures published by the Office for National Statistics (ONS), the economy shrank by 0.1 per cent in the first month of 2025.
Output was dragged down by a sharp drop in the production sector, the ONS reported, after growth of 0.2 per cent over the three months to the end of January.
Speaking this morning after the economic figures were unveiled, Chancellor Rachel Reeves said: “The world has changed and across the globe we are feeling the consequences.”
It comes after the US President has pursued an unpredictable tariff policy, hiking taxes on imports from allies Canada and Mexico and imposing steep hikes on goods from China, as well as global tariffs on metal and threatening 200 per cent taxes on EU alcohol imports.
UK economy
But in an apparent shift away from No 11’s position, when asked if the US president’s trade policy was to blame for the contraction in the economy, a No 10 spokesman told reporters: “No.”
He said: “We know the cost-of-living crisis is not over, and this government is determined to make people better off, and that’s why economic growth is the Prime Minister’s number one priority.
“Growth is what funds our public services, it is what enables investments in our hospitals and schools and, of course most importantly, raises living standards for everyone, everywhere.”
The spokesman reiterated that the government continues to engage with the US administration on tariffs, and insisted they were global and not targeted at the UK.
He added: “As we’ve said, we won’t be imposing tariffs immediately.
“And let’s be clear, industry doesn’t want to see a trade war where both sides keep escalating the situation, and standing up for industry means finding a solution.
“Our approach to the US remains one of a cool-headed approach, pragmatic. We continue to have productive discussions securing a wider economic deal.”
Tariffs impact
Ahead of Trump’s inauguration in January, the Republican politician had promised to impose tariffs on his first day in office after his election in November.
Commenting this morning, Reeves did not directly discuss the US president but implied the impact of his tariffs could damage the UK’s economy.
The Chancellor told broadcasters during a visit to Scotland: “I believe, this government believes, in free and open trade, and will continue to make that point.
“We are in negotiations at the moment for an economic agreement with the United States to try and ensure that British exporters are supported to export all around the world, including to the United States, and to ensure that they don’t push up prices for UK consumers with more tariffs.”
The Confederation of British Industry (CBI) said a contraction in the UK economy in January showed the UK’s recovery is “fragile”.
Ben Jones, lead economist at the CBI, said: “After a surprisingly strong performance in December, some payback was always a possibility in January.
“But the mixed picture across different sectors in recent months suggests the recovery is still fragile.”