Breaking News: Trump declares total trade war as he vows to slap tariffs on any country targeting US……See More

Donald Trump has deepened the trade war he launched at the beginning of his second administration with a new bombshell announcement.

Donald Trump has announced the US will introduce reciprocal tariffs which could threaten a trade war with allies and rival countries.

The US President, speaking in the Oval Office on Thursday, described it as a “beautiful system” and claimed it will force job numbers “to go up” as well as eventually pushing down interest rates.

Mr Trump, explaining his reciprocal tariffs system, said “whatever they charge us, we’ll charge”. He added: “I’ve decided for purposes of fairness that I will charge a reciprocal tariff. It’s fair to all. No other country can complain.”

The president has signed an executive order directing the US Trade Representative and Commerce Secretary to propose new levies on a country-by-country basis in a bid to rebalance trade relations between the US and rest of the world.

A UK senior minister has said the British Government will “wait and see” whether the fresh tariffs announced “actually come to pass”.

The Trump administration has insisted its new tariffs will level the playing field between US manufacturers and foreign competitors.

However, the new taxes would likely be paid by American consumers and businesses either directly or in the form of higher prices.

Mr Trump identified VAT as a trade barrier to be included in any reciprocal tariff calculations, which would affect the UK and European Union where the levy is used widely.

Other nations’ tariff rates, subsidies to industries, regulations and possible undervaluing of currencies would be among the factors the Trump administration would use to assess tariffs.

A senior White House official speaking on condition of anonymity ahead of the announcement said the expected revenues from the tariffs would help to balance an anticipated £1.5trillion ($1.9tn) US budget deficit.

The official also said the checks needed before the tariffs were imposed could be completed within a matter of weeks or a few months.