The European Union has a “strong plan” in place to retaliate against any US tariffs slapped on the bloc’s exports, EU chief Ursula von der Leyen said.

Ms von der Leyen said the EU – the third largest economy in the world – would “protect our interests, our people, and our companies” but would prefer to negotiate with Washington.

US president Donald Trump is set to slap levies on imported goods from several trading partners around the world, including Britain, on Wednesday.

He believes high tariffs on foreign imported goods will protect US manufacturing and boost the American company, despite fears the move will fuel inflation.

A 25 per cent tariff on all cars imported into the US will begin on Thursday. In March, Mr Trump imposed a blanket 25 per cent tariff on US steel imports.

“We do not necessarily want to retaliate. But if it is necessary, we have a strong plan to retaliate and we will use it,” Ms von der Leyen said. “We will protect our interests, our people, and our companies.”

As the world economy braces for Donald Trump’s unveiling of a swathe of tariffs, some country leaders will be fearing the worst after Washington singled out a “dirty 15” list of nations.

Although not naming the countries, treasury secretary Scott Bessent said the group of nations traded heavily with the US and had high tariffs on US goods, plus held non-tariff barriers such as domestic-content production rules.

Coining the term “dirty 15”, Bessent was referring to 15 per cent of countries that account for the bulk of US trading volume – a list of nations economists expect could be hit by Trump’s tariffs.

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The United States has hit out at the “fundamentally unfair” global trade system.

Karoline Leavitt, the White House press secretary, said: “Our country has been one of the most open economies in the world, and we have the consumer base, hands down.”

She said it was “fundamentally unfair” that countries did not import US goods and it had “gutted our industries and hollowed out key workforces.”

Donald Trump’s trade war will expand across the globe on Wednesday as his administration prepares to impose a wide set of tariffs on goods imported to the US from overseas.

Dubbed ‘Liberation Day’ by the US president, it seems likely all nations will be included in the sweeping measures – the UK included.

This is despite attempts by ministers to secure an exclusive ‘carve-out’ with the Trump administration, something Sir Keir Starmer has admitted has not been agreed upon.

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Mercedes-Benz denied a report by Bloomberg News on Tuesday which said the carmaker was considering withdrawing its cheapest models in the US ahead of an added 25 per cent tariff to be imposed on auto imports.

“This is without any merit. Mercedes-Benz continues to seek sales growth for its highly desirable vehicles,” a Mercedes-Benz spokesperson said in an emailed statement in response to the report.

Bloomberg said the carmaker was considering withdrawing more entry-level models from sale as part of broader tariff contingency plans.

US tariffs on global goods will be effective immediately from tomorrow, the White House said.

US president Donald Trump is expected to slap “reciprocal tariffs” on trading partners at different rates on Wednesday.

A 25 per cent tariff on all cars imported into the US will begin on Thursday, the White House said.

In March, Mr Trump imposed a blanket 25 per cent tariff on US steel imports.

“The tariff announcement will come tomorrow. They will be effective immediately,” White House spokesperson Karoline Leavitt said.

“It would be taking place today, if not for April Fool’s Day, but tomorrow will be the day.”

US president Donald Trump is “perfecting” his global tariffs ahead of announcing them on Wednesday, the White House said.

“I don’t want to get ahead of the head of the president, this is obviously a very big day. He is with his trade and tariff team right now,” Trump’s press secretary Karoline Leavitt said.

“He is perfecting it to make sure this is a perfect deal for the American people and the American worker.”

US stock indexes bounced off session lows on Tuesday, helped by gains in heavyweight technology stocks and Tesla, while investors awaited details on Trump’s tariffs set to be announced on Wednesday.

Financial markets had been volatile in recent weeks as investors assessed the economic fallout of the US president’s extensive tariff plans, which have sparked worries about a US economic slowdown and higher inflation.

The benchmark S&P 500 closed the first quarter 4.6 per cent lower, marking its most dismal three-month stretch since July 2022.

But after falling about 1 per cent earlier, the S&P 500 gained ground in the session, with beaten-down technology shares taking the lead.

Microsoft rose 1.6 per cent and Tesla jumped 5.9 per cent. Other big tech stocks, such as Amazon.com, Nvidia and Meta Platforms, rose about 1 per cent each.

A member of the OBR’s Budget Responsibility Committee said US tariffs at 20 or 25 per cent maintained on the UK for five years would “knock out all the headroom the government currently has”.

Giving evidence to the Treasury Committee on the spring statement, David Miles said: “If tariffs at 20, 25 per cent were put on the UK and maintained for five years, our assessment of what that does is that it will knock out all the headroom that the government currently has.

“Had we made that a central forecast, and had the government not changed policy at all knowing that we were going to take that as our central forecast, then the headroom would have pretty much all gone.

“Of course that would have been in some ways, a very extreme assumption. Because not only would that be as bad as people might expect in the very near term, but it would have been maintained for five years, which is beyond the next presidential election in the US.”

Mr Miles said a “very limited tariff war” that the UK stays out of could be “mildly positive” for the country.

He added: “There’s a bit of trade that will get diverted to the UK, and some of the exports from China, for example, that would have gone to the US, they’ll be looking for a home for them in the rest of the world.

“And stuff would be available in the UK a bit cheaper than otherwise would have been. So there is one, not central scenario at all, which is very, very mildly potentially positive to the UK. All the other ones which involve the UK facing tariffs are negative, and they’re negative to very different extents.”

Our chief political commentator John Rentoul writes:

The prime minister deserves full marks for courage. He is not afraid to face the most difficult problems head on.

He went to see Donald Trump – and when the US president insulted our ally Volodymyr Zelensky, he phoned Trump to try to mediate. He put up taxes. He cut the planned rate of increase in welfare spending. He is going to fix the NHS, decarbonise electricity and build 1.5 million homes.

And now, he is hosting an international summit meeting to talk about how to deal with illegal immigration. Representatives from more than 40 countries – and from tech giants including Meta and TikTok – met at Lancaster House on Monday and Tuesday to discuss the problem.

As Keir Starmer likes to boast, if he sees a problem, he does not “walk round it”. He knows that people feel strongly about the small boats and that the vast majority of the public think that immigration generally has been too high.

In the past, politicians have been accused of minimising the issue or of trying to change the subject, but Starmer seemed determined to identify with popular indignation. “I know many of you are angry about illegal migration,” he wrote in an article for the Daily Mail yesterday. “You’re right to be.”

Yet the summit had the unmistakable feel of a talking-shop convened in response to embarrassing headlines about the numbers arriving by small boat being higher in the first three months of this year than at this stage in any previous year.