Bank of England Governor Andrew Bailey has cautioned that tariffs implemented by the U.S. administration under President Donald Trump could adversely affect UK consumers and the economy at large.

During a session with Members of Parliament, Bailey highlighted that increasing trade tensions could create significant risks to both the UK and global economies.

The U.S. has escalated its tariff regime recently, imposing new tariffs on imports from Mexico and Canada, alongside a doubling of the levies on goods from China.

Bailey characterized the potential impact as substantial, indicating that these tariffs could reduce disposable income for UK consumers.

He acknowledged the seriousness of the situation by stating, "Yes.

We serve the people, and we have to take it very seriously."

Bank officials, including Megan Greene, a member of the Bank's monetary policy committee, noted the uncertainty surrounding the extent of U.S. tariff implementation and the corresponding international responses.

They outlined several mechanisms through which tariffs could negatively impact the UK economy.

For example, if tariffs are imposed on UK exports to the U.S., British firms may face increased barriers to accessing the U.S. market, which would exert downward pressure on the UK’s economic growth.

Conversely, such restrictions could also dampen inflation by lowering prices.

Greene further explained that disruptions to established supply chains could necessitate a restructuring that would likely hinder growth while simultaneously increasing inflation pressures.

She remarked, "Ultimately, tariffs would push down on growth," highlighting the prevailing uncertainties about the broader economic implications of the U.S. tariff strategies.

Professor Alan Taylor, another member of the monetary policy committee, echoed this sentiment, arguing that the risks posed by the tariffs outweigh potential benefits, impacting economic activities both in the UK and globally.

He metaphorically described trade interferences as placing "sand in the wheels" of commerce.

Bailey reaffirmed his agreement with the committee's assessments, advocating for the resolution of trade disputes through the World Trade Organization rather than through bilateral negotiations between the U.S. and other nations.

Despite the assertions from the Trump administration that higher tariffs would lead to better trade agreements with various countries, experts have expressed concerns that such barriers could ultimately backfire, resulting in increased prices and inflation domestically and hindering international economies.

In a related context, Bailey cautioned that if the U.S. were to withdraw from global financial institutions, such as the International Monetary Fund (IMF) and the World Bank, it could exacerbate existing uncertainties in the global economic landscape.

Some members of the Trump administration have previously suggested such a departure, which Bailey described as "a very damaging thing for the world." He expressed support for the incoming U.S. treasury secretary's belief in multilateral coordination as a positive signal for international economic cooperation.