President Donald Trump speaks to reporters in the Oval Office.

Donald Trump has confirmed plans to impose 25% tariffs on all cars imported to the US in a potentially huge blow to Rachel Reeves.

The American president’s announcement came just hours after the government’s own financial watchdog warned such a move would damage economic growth in the UK and wipe out the chancellor’s spare cash.

Speaking to reporters in the Oval Office on Wednesday, Trump said: “What we’re going to be doing is a 25% tariff for all cars that are not made in the United States. We start off with a 2.5 per cent base, which is what we’re at, and go to 25 per cent.”

He added: “We’re going to make it all countries, and we’re going to make it very lenient. I think people are going to be very surprised.”

The move, which is designed to boost the American car industry by making foreign vehicles more expensive, could trigger a global trade war as........

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