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Donald Trump would not risk breaking his promise to Americans to improve the cost of living in the US by raising tariffs, says the head of investment company Frank Investments.

Trump has said he wants to increase tariffs by 10% on goods imported from around the world and to 60% on goods from China as part of his plan to protect U.S. industries.

Raising tariffs would lead to rising inflation rates, meaning Trump would cut prices less, as he promised voters, Paul Sedgwick tells Sky News.

“I think it’s fair to say that Donald Trump is a dealmaker. And I personally believe that he has a negotiating position,” he says.

“He believes in the fact that he wants the rest of the world to buy more American goods. He wants to see productivity increase in America and he wants to have some kind of negotiation with the rest of the world around us.”

“Does he want to start a trade war, or does he want to suddenly find himself imposing punitive tariffs on the rest of the world and they start retaliating? This drives up inflation rates. It depresses growth and has a negative impact on the global economy.

“I personally don’t see that. I don't think that's in his best interest. During the campaign he talked about the impact of inflation on the ordinary budget in America.”

“The last thing he wants to do is drive prices back up. Personally, I think this is a negotiating tactic.”

What impact could this have on the UK?

Mr Sedgwick says a good performance in the US economy reflects well on the British economy across the pond.

In the “worst case scenario,” high inflation in the US would result in no growth and slow down the economy. That, says Mr Sedgwick, would make it much harder for Chancellor Rachel Reeves to realize her ambitions.

“But as I said, I'm sure Trump wants to continue to have a good relationship with the UK, wants to continue to work with the UK on a trade basis and has talked about trade deals in the past,” he adds.