British policymakers watch nervously, fearing a weaker pound and inflation even if US tariffs are not applied directly

• Economic news updates – US politics live

No one can say they were not warned: tariff was “the most beautiful word”, Donald Trump said during his election campaign, and Canada, Mexico and China were first on his target list. Yet somehow many very clever people convinced themselves that, because of the sheer economic irrationality of the idea, the US president would not go through with it.

Financial markets must now reckon with this new, erratic reality – with potentially grim knock-on effects for the UK, and Labour’s tax and spending plans.