President Donald Trump's swathe of new tariffs on imports into the United States could spark a negative fallout costing the global economy a staggering 1.4 trillion dollars, UK experts claim. Since he came into office in January Trump has announced a whole raft of tariffs on imported steel, aluminium and vehicles coming into the US.

Unlike other countries, the UK has decided to not yet to set out plans to retaliate with tariffs of its own - while many furious nations have responded by slapping tariffs on US imports across their own borders. Now analysis by Aston University researchers estimates if there is a full global retaliation with reciprocal tariffs - sparking extensive global disruption and reduced trade flows there could be a $1.4 trillion global welfare loss.

The UK researchers are the first to estimate the economic fallout from six US trade tariff scenarios and their impact on trade flows, prices, production and welfare.

In their report, Tariffs and Triumph: The UK’s Edge in a Fractured World, Professor Jun Du and Dr Oleksandr Shepotylo, from Aston Business School’s Centre for Business Prosperity, model the potential global economic costs of US tariffs and outline a series of strategic UK responses.

And they urge for swift, coordinated action from Sir Keir Starmer's government to reduce the possible huge financial risks - while also seizing opportunities in an increasingly disrupted trade landscape.

Professor Jun Du said: "The picture for tariff measures may not be clear at the moment, but what is clear is that economies like the UK need to plan for various eventualities and start to put mitigating measures in place.

"US tariffs offer the UK a potential fortune through trade diversions, yet these gains could complicate efforts to reset UK–EU relations, amplifying economic divergence, political distrust and misalignment.

"Our report will help policymakers look at the costs and benefits of the scenarios and develop a position to move forward."

Among the headline tariffs already in place US imports from Mexico and Canada are subject to 25 per cent tariffs, imported steel and aluminium tariffs are in place worldwide, tariffs on China have risen to 20 per cent, car import tariffs are due to be imposed and countermeasures are rolling out across Europe, Asia and the Americas.

Using core economic principles and a structured gravity approach – an economic framework that quantifies the effects of international trade – the new report analyses data for 132 countries and how tariffs may affect them.

Key scenario findings include that from the US's initial tariffs: US prices rise 2.7 per cent and real GPD per capita declines 0.9 per cent. While welfare declines in Canada by 3.2 per cent and Mexico by 5 per cent.

Then retaliation by Canada, Mexico and China: US loss deepens to 1.1 per cent, welfare declines in Canada by 5.1 per cent and Mexico by 7.1 per cent.

Then US imposes 25 per cent tariffs on EU goods causing a sharp transatlantic trade contraction, EU production disruptions, US welfare declines 1.5 per cent.

If the EU then retaliates with 25 per cent tariff on US goods: prices rise across US and EU, mutual welfare losses and intensified negative outcomes for the US. UK experiences modest trade diversion benefits.

In the event of a US global tariff: severe global trade contraction and substantial price hikes substantially affect North American welfare and UK trade volumes.

And in the event of full global retaliation with reciprocal tariffs we see extensive global disruption and reduced trade flows, severe US welfare losses, $1.4 trillion global welfare loss projected.

For the UK, reductions in imports from the US expose critical vulnerabilities in UK supply chains, and under the worst-case scenario, UK exports to the US fall by 43.6 per cent.

Retaliatory tariff measures would also substantially reduce UK exports to other markets around the world, in particular to Mexico, and UK–EU trade would be reduced.

Yet while the tariffs highlight vulnerabilities for the UK, they also present opportunities for boosting trade across the Atlantic.

In a scenario where the EU retaliates with tariffs US goods, UK exports to the US would potentially surge by 17.5 per cent.

To signal a commitment to continued European cooperation, the researchers recommend UK policymakers take a pragmatic approach in response to US tariffs that balance short-term gains with long-term stability.

They also suggest pairing US bilateral trade talks with symbolic gestures to the EU, such as reviving the youth mobility scheme.

Dr Oleksandr Shepotylo said: "Although we predict significant costs for the UK, there are also opportunities for leaders to employ rapid measures to mitigate against the risk of a full-scale trade war and enhance the UK’s position during this challenging time.

"We hope that our report will be read and used by those with decision-making powers to develop a strategy to move forward in uncertain times."