US tariffs risk recession and Scotland must be ready to deal with it – Swinney

Tariffs imposed by the US risk causing a recession, Scotland’s First Minister has said.

John Swinney warned of the economic impact of the policy decisions taken by the Trump administration, saying it would likely cause damage if the Scottish Government fails to take action, but insisted that the “time is right” for Scotland to become an independent country.

The US President imposed a 10% reciprocal tariff on all goods exported from the UK, along with the 25% global levy on car exports, but has since announced a 90 day delay to the plans.

At a press conference on Monday, the First Minister was asked if there would be a recession in the next 12 months.

“The honest answer to that is that I don’t know,” he said.

“But I think there’s a risk of it and that’s why I’m setting out the steps that I’m taking today, because I want to make sure we’re as front-footed as we can be to resist that eventuality.

“I can’t say to you with certainty it will happen, but I think there’s a risk it might and, therefore, we’ve got to be on the front foot to resist that.”

The First Minister added that a recession is “more likely” than it was before the tariff announcement was made.

But asked if the turmoil would make him drop his push for Scottish independence, the First Minister took the opposite position, citing potential closer relations with the EU and enhanced economic powers.

“I believe the time is right for that (independence), because it is so important that we have the economic scope and powers to act in the interest of the people of Scotland,” he said.

Mr Swinney called a press conference on Monday morning, bringing forward the announcement of his legislative agenda to next month to allow for a “full year of delivery” before the next Holyrood election.

The programme for government – usually announced in the first week after the summer recess – will be laid out to Holyrood on May 6, laying out the blueprint for the final 12 months of the parliamentary term.

“There is a need to challenge ourselves on policy to make sure the policy interventions that we take are commensurate with the scale of the challenges that we now face,” he said.

“That’s essentially the work that the Scottish Government is going to do to make sure that we have a programme for government that is doing the two things that I said it will do.

“It will focus on delivering for the people of Scotland and it will focus on delivering hope for the people of Scotland and that’s got to be the core of the programme that we bring.”

The announcements coming will not require a “fundamental realignment” of the budget, the First Minister said, claiming there was sufficient scope for cash which has not yet been allocated to fund new initiatives.

Scottish Conservative finance spokesperson Craig Hoy said: “It defies all logic that John Swinney wants to compound the global economic turbulence that’s currently buffeting Scotland by once again pushing for independence.

“Tearing Scotland out of the UK would be an act of economic self-harm at any time, but doing so now, when the world economy is facing extreme pressure, would be utterly reckless.”

The Scottish Greens called for climate action to be key to the next programme for government.

Scottish Green co-Leader Lorna Slater said: “The First Minister has promised a year of delivery, and our climate has to be at the heart of it.

“With bills soaring and stretching households and families to their limits, it is vital that we move away from fossil fuels and support people in making green choices.

“That means acting to cut the eye-watering prices that people are being forced to pay for public transport, and providing far more support for green energy and insulating homes.”

The First Minister also urged Chancellor Rachel Reeves to abandon her fiscal rules in response to instability, but Scottish Labour finance spokesman Michael Marra warned such a move would result in “economic chaos”.

“For years, fiscal incompetence has been SNP practice and now it appears to be official policy.

“An end to any kind of fiscal rule promises economic chaos and vast interest rate rises hitting growth and hammering mortgage rates.

“Liz Truss showed us that working people pay the price when governments gamble with our economy, but the SNP wants to do the same again.

“The SNP simply cannot be trusted with your money.”

While Scottish Lib Dem leader Alex Cole-Hamilton said the SNP has been “promising jam tomorrow” since taking office in 2007.

“People won’t believe that another year will see the SNP succeed where they’ve failed for so long,” he added.