Rachel Reeves has admitted the UK could still be hit by the impact of Donald Trump’s tariffs even if a deal can be struck with the US. Sir Keir Starmer’s Government is prepared to offer concessions to the US in an attempt to reach an “economic deal” which could mitigate the impact of the president’s levies.
But the Chancellor on Wednesday acknowledged the UK would not be “out of the woods” even if a deal could be reached with the White House because of the global economic storm the president’s measures will unleash. She said: “I think that’s really important to understand, because even if we are able to secure an economic deal with the United States – which we very much want to secure and are working hard to secure that – even if that’s possible, (it) doesn’t mean somehow that we are out of the woods and not impacted by tariffs.
“So we don’t just want to see an agreement between the UK and the US, we want to see free trade, fair trade continue.”
Ms Reeves said she had been discussing the situation with European Commission economy chief Valdis Dombrovskis.
The European Union hit back with counter-tariffs during Mr Trump’s first White House term and commission president Ursula von der Leyen said this week “we do not necessarily want to retaliate, but we have a strong plan to retaliate if necessary” in response to Wednesday’s announcement.
Ms Reeves said “let’s see how other countries and other trading blocs respond”, adding: “We are discussing with other countries and the EU about the appropriate response to whatever announcements are made later today.”
Mr Trump is expected to slap import taxes on goods going to the US from around the world in a statement at 9pm.
British businesses are braced for the impact of the president’s “liberation day” tariffs, which have the potential to derail the UK Government’s hopes for economic growth.
The UK is not expected to immediately retaliate, with Ms Reeves insisting the Government would not be “posturing” in search of a “quick headline”.
The Chancellor said she had been talking to UK exporters on Wednesday morning who she said did not want a rushed response.
