GBP to USD: is the pound weak against euro and dollar - how do Trump tariffs affect holiday prices for Brits?

• Trump’s new 10% baseline tariff on imports, including from the UK, is causing market uncertainty
• The value of the pound has dropped, making foreign holidays, particularly to the US, more expensive
• Higher prices are expected for goods and services in the US due to increased tariffs on imports
• Other countries facing steeper tariffs, like the EU, China, and Japan, may also see price increases for British tourists
• British travellers may want to consider destinations with lower tariff impacts or explore staycation options

Last week, Trump declared America’s “Liberation Day” as he unveiled a new 10% “baseline” tariff on all goods imported into the United States.

This tariff came alongside even higher rates for countries accused by the US of engaging in “unfair trade practices”: the EU, China, and Japan are among those facing the steepest hikes — 54%, 20%, and 24% respectively.

The impact of Trump’s decision extends far beyond the borders of the US, causing ripples throughout the global financial markets. Uncertainty, a major driver of market volatility, has become a hallmark of the situation.

The UK, slapped with the 10% baseline, hasn’t escaped unscathed, and the new tariffs have triggered a sharp decline in the value of the pound.

As of Monday, April 7, the pound had dropped by 1.28% against the US dollar, trading at 1.272 dollars per pound, and by 0.87% against the euro, at 1.165 euros.

As Easter approaches, British holidaymakers are facing an uncertain financial landscape. These shifts could lead to a significant increase in costs, particularly for those heading to the US or other countries that may see heightened tariffs under Trump’s new regime.

How tariffs impact holiday costs

The direct consequence of a falling pound is that British holidaymakers will get less value for their money when exchanging currency.

For instance, a £1,000 budget for a trip to the US could now translate into fewer dollars than it would have last year, as the pound loses its purchasing power.

And even once you’ve converted your currency, the prices of goods and services may be higher than they were in recent years.

Since a tariff is a tax imposed on imported goods and services, this makes products originating outside the US more expensive for consumers - particularly worrying for those planning to visit America.

As businesses attempt to recoup higher import costs by raising prices for consumers, Trump's 10% baseline tariff will likely result in higher prices for a variety of goods, from electronics to food and travel services.

British consumers will likely feel the squeeze when paying for items. Hotels, flights, meals, and entertainment costs - often quoted in dollars - could see a hike as businesses adjust their prices to account for the weakened pound.

What about other countries?

For countries like China, Japan, and the EU, which face even steeper tariff increases, the situation is more complex.

While these hikes will likely cause inflationary pressures on goods imported to the US, the impact on holiday prices for British tourists may be less direct but still significant.

For example, the European Union, particularly countries like France, Italy, and Spain, may face higher costs for imported goods as tariffs ripple through the global supply chain.

The effects on the global economy could still drive up prices for travel-related services, particularly for those countries reliant on US imports.

It could be beneficial for tourists to consider destinations that have ‘only’ been hit with the 10% baseline tariff, as they are less likely to see drastic price increases compared to those countries facing higher tariffs.

But while it might make sense to target destinations facing lower tariffs, there are other factors to consider, such as the exchange rate, general inflation, and other economic conditions in the region.

How long will it last?

Looking beyond Easter, the long-term outlook for British tourists remains unclear. Much will depend on the future course of international trade and how the UK, EU, and other global economies respond to the new tariffs.

If the pound continues to weaken against major currencies, it could further dampen the appeal of international travel for British citizens, especially for more distant destinations.

But it’s not all bad news. For those seeking holidays closer to home, UK-based destinations may offer a more affordable alternative.

Staycations have grown in popularity in recent years, and with the global economic uncertainty surrounding travel, more Britons may opt to explore local options instead of venturing abroad.

Are you struggling to make ends meet as costs continue to rise? You can now send your stories to us online via YourWorld at yourworld.net/submit. It's free to use and, once checked, your story will appear on our website and, space allowing, in our newspapers.