UK ministers are doubling down on a trade deal with the US in order to ease the impact of a 10% tariff on exports in a critical moment for global trade.

Vowing to “make the US wealthy again” and create a new “golden age”, Donald Trump said the US can no longer afford to hold trade deficits with other countries.

“We take care of countries all over the world,” said the president in an address in the White House Rose Garden. He said “it is time the US took care of its own people.”

He announced a 20% tariff on the EU and 25% on all foreign-made cars. China (which imposes a 67% levy on US imports) faces a 34% levy. However, the US will charge many countries “approximately half” of what they are charging the US, he said.

“So, the tariffs will not be a full reciprocal. I could have done that, yes, but it would have been tough for a lot of countries,” he said.

While the UK escaped the higher levies, the 10% levy was received badly by sectors such as Scotch whisky which expects to be hit.

Economists have warned that the UK will be affected by the high charges put on those countries he calls the “worst offenders” such as China, Japan and the EU.

The OECD recently warned that if the US and its trading partners raise tariffs by 10 percentage points, global GDP could fall by 0.3% within three years, while inflation could rise by an average of 0.4 percentage points each year over the same period.

Mr Trump singled out China and the European Union for criticism. “They rip us off. It’s so sad to see. It’s so pathetic,” he said. “We import virtually all of our computers, phones, TVs and electronics.”

He claimed that a single shipyard in China is churning out more ships in a year than all of America’s shipyards.

In an invitation to manufacturers to invest in US plant, Mr Trump said that companies that build their products in the US will pay zero tariffs.

He said that “soon” he will be getting calls from kings, queens and ambassadors looking for tariff exemptions.

His message was: “Terminate your own tariffs, drop your barriers, don’t manipulate your currencies.. and start buying tens of billions of dollars of American goods.”

UK ministers will now hope that a trade deal can be concluded that may enable the UK to secure an exemption as the US does not have a trade deficit with the UK.

Jonathan Reynolds, the UK Business Secretary, said that “nothing was off the table” in terms of possible retaliatory action, but said that the government’s preferred outcome was to do a trade deal that reduced the tariffs.

A Downing Street source said: “We will keep negotiating, keep cool and keep calm. We want to negotiate a sustainable trade deal and, of course, to get tariffs lowered.”

The US is the biggest export market for Scotch whisky, worth almost £1 billion. A spokesperson for the Scotch Whisky Association said: “The industry is disappointed that Scotch Whisky could be impacted by these tariffs.

“We welcome the intensive efforts by the UK government to reach a deal with the US administration, and we continue to support this measured and pragmatic approach towards a mutually beneficial resolution.”

On Wall Street, the Dow Jones Industrial Average closed up 0.56%, while the S&P 500 advanced 0.67% and the Nasdaq Composite saw out the session 0.87% firmer. Earlier, the FTSE 100 closed 26.32 points (0.3%) lower at 8,608.48.

Nigel Green, CEO of global financial advisory giant deVere Group, said Mr Trump “peddles in economic delusion” and risks triggering a dangerous global slowdown.

“This is how you sabotage the world’s economic engine while claiming to supercharge it,” he said. 

“It’s a seismic day for global trade. Trump is blowing up the post-war system that made the US and the world more prosperous, and he’s doing it with reckless confidence.”

Rain Newton-Smith, chief executive of the CBI, said: “Business has been clear: there are no winners in a trade war. Today’s announcements are deeply troubling for businesses and will have significant ramifications around the world.

“A cool and calm reaction from the UK Government is the right response: UK firms need a measured and proportionate approach which avoids further escalation. Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices.

“The government has rightfully tried to negotiate a carveout to any incoming tariffs through a bilateral economic deal. As they seek to grow the economy, negotiating stronger trading relationships with all like-minded partners will be foundational to any success.

“The UK must use this unpredictable period to double down on its commitment to free, fair and open trade. Doing so will provide businesses with the confidence needed to kickstart growth, foster innovation, and boost productivity.”

Shevaun Haviland, Director General of the British Chambers of Commerce, said:  “The Government has kept a cool head so far and must continue to negotiate. This is a marathon not a sprint, and getting the best deal for the UK is what matters most. 

“But no-one will escape the fallout from these decisions, there will be an increased risk of trade diversion, and it will wreak havoc on businesses communities across the world. 

“Orders will drop, prices will rise, and global economic demand will be weaker as a result. This is a lose-lose situation for everyone.

“So, it is vitally important that the government does not give up on negotiations. Tariffs can be lifted at any time and the US has signalled its willingness to do some form of deal with us.

“We would advise businesses to immediately start negotiations with their US customers on managing the impact of these tariffs – depending on their contracts, there may be deals to be done. In the long-term exploring replacement markets, especially the EU, CPTPP countries or other trade deals, due to be made later this year, will be options. 

“Support may also be available from the British Business Bank’s Growth Guarantee scheme which can offer financial support to firms with cashflow issues.”