Donald Trump's tariffs could force Rachel Reeves to backtrack on Labour's vow not to raise taxes on workers, economic analysts from EY Item Club have warned.
Experts predict the US president's global trade war will have a hugely damaging impact on Britain's economic growth and prove a barrier to business investment.
EY Item Club, The Telegraph reports, lowered its forecast for UK growth next year from 1.6% to 0.9%, and warned the resulting loss in tax revenues could reduce or even wipe out the £9.9billion of fiscal headroom Ms Reeves has left herself.
In light of that forecast, Reeves may be forced to break her tax promise or revisit her fiscal rules in order to balance the books and honour the pledge to boost defence spending.
Sky News reports EY said the weaker global economic backdrop and spiralling levels of uncertainty would weigh on both families and businesses.
It said consumer mood remained "cautious" amid the continuing pressures on household budgets.