UK Prime Minister Keir Starmer said his government would react with "cool and calm heads".

"Nobody wins in a trade war, that is not in our national interest," Starmer said.

Higher prices loom

The tariffs are not paid by the foreign countries they target, but by the US-based companies that buy the goods to sell to US citizens. Now companies must decide whether to absorb the new taxes or pass them on to consumers in the form of higher prices.

After Trump added tariffs to imported washing machines during his first term, the median price of an appliance jumped more than 11 percent, adding about $86 to the cost of a new unit, according to University of Chicago researchers.

A recent CNBC survey found most CEOs saying prices will rise anywhere from 5 percent to 20 percent.