Workers are staring down the barrel of a pay freeze and job cuts as Donald Trump’s tariffs send shockwaves through boardrooms, it is claimed.
Bosses at the nation’s biggest firms are bracing for the deepest hiring slump since the Covid crash of 2020, as American import taxes threaten to strangle global investment and throw long-term business plans into disarray.
According to a stark new report by consultants Deloitte, companies are preparing to slash headcounts and scale back pay rises to cope with the fallout from the US president’s global trade war.
Wage increases are set to be watered down to a meagre 3%, despite forecasts that inflation will rise to 3.1 per cent—meaning millions could see their living standards go backwards once again.
And it’s not just manufacturing firms feeling the heat. The squeeze is spreading to the City, with financial services firms pulling back on hiring amid what one expert has described as ‘structural pressures’—a toxic mix of sky-high inflation, interest rate worries and international uncertainty.
Only one in ten finance chiefs say they plan to invest more this year. The rest are focused on belt-tightening—cutting costs, shelving growth plans, and battening down the hatches.
The warning comes just days after Mr Trump announced fresh tariffs under the banner of “Liberation Day”—a move that has rattled markets and undermined confidence on both sides of the Atlantic.
Despite softening his stance on some goods, UK exports still face a blanket 10% levy when entering the US, prompting fears of a £22 billion hammer blow to the British economy.
Amanda Tickel, tax and trade chief at Deloitte, said firms were “modelling worst-case scenarios” and scrambling to prepare customs operations—but admitted most would be reluctant to shift supply chains until the dust settles.
The troubles don’t end there. Chancellor Rachel Reeves’s decision to hike employer National Insurance contributions is adding more pressure to already fragile businesses.
And the pain is filtering down fast. Recruitment firm Morgan McKinley revealed an 11% slump in City job vacancies during the first quarter of the year.
Mark Astbury, a director at the firm, told the Telegraph that companies exposed to international markets were reassessing their headcounts in the face of “geopolitical jitters” and Trump’s tariff barrage.
In a partial climbdown, Mr Trump has offered a short-term exemption for popular tech products like smartphones and laptops. But even this may be short-lived.
US Commerce Secretary Howard Lutnick warned the relief could expire “within a month or two,” threatening fresh turbulence for global tech giants and rattling stock markets once again.
Meanwhile, China has retaliated with tit-for-tat tariffs of up to 125%, intensifying fears of a drawn-out economic war that could hit consumers and companies alike.
In a strongly worded statement, Beijing urged Washington to “correct its mistakes” and abandon the “wrong practice of reciprocal tariffs.”
