Brexit is a “godsend” to the UK because it means we will avoid a trade with with the US despite Donald Trump’s tariffs, according to leading Brexiteer Jacob Rees Mogg. The EU has been hit by tariffs of 20% and is set to retaliate with its own charges on imports from the US. However, Mr Trump imposed lower tariffs of 10% on the UK, and the British government is avoiding imposing new charges of its own. Instead, the UK will continue attempting to agree a trade deal with the US administration that could end the tariffs entirely.
Sir Jacob, a Conservative and former Minister of State for Brexit Opportunities and Government Efficiency, said countries targeted by Mr Trump could respond “by imposing additional tariffs of their own, leading to a global trade war, which would be a disaster.” He said: “It seems certain that the EU will respond in this way, which is foolish and masochistic. It will harm consumers, increase prices, and lower economic growth. Reciprocity, in this instance, is just as damaging as the initial imposition of tariffs.
“It is an absolute godsend that the UK is no longer a member of the EU and, therefore, will not have to go down this route. The government is to be praised for avoiding it so far.”
The Tory politician praised Labour Prime Minister Sir Keir Starmer’s response to the tariffs, saying it would be “easy” and “popular” in the short term at least to hit back at the US.
He said: “The UK is in an excellent position to maximise the potential benefit, it is the supreme Brexit opportunity. Free trade has at all times helped economies, it is a way of encouraging growth as it helps all but the inefficient, whose poorly used capital can be reallocated.
“As we are out of the EU, we have already shown a more sensible attitude towards Trump. It is essential that we hold the line on not retaliating. Instead, we ought to lift every barrier we can think of, not just on trade with America, but with the rest of the world too.”
The UK exported £60.4 billion of goods to the US in 2023, around 15% of all goods exports.
While the blanket 10% tariff will come into effect on Saturday, the car industry has already been hit with a 25% import tax which began in the early hours of Thursday morning.
The Prime Minister acknowledged today there would be an economic hit to the UK from the 10% import tax slapped on British goods entering the US.
He indicated that he would fight for a trade deal with the US rather than immediately respond with retaliatory tariffs, although he stressed that “nothing is off the table”.
Within government there was an element of relief that Mr Trump had not singled the UK out for more punitive measures – the European Union’s rate was 20%, Japan’s was 24% and Chinese goods arriving in the US will be hit with a 54% tariff.
Addressing senior executives from some of the UK’s biggest companies in Downing Street, Sir Keir said: “Clearly, there will be an economic impact from the decisions the US has taken both here and globally.”
He said that “nobody wins in a trade war” and stressed the UK had a “fair and balanced trade relationship with the US”.
Negotiations on an “economic prosperity deal” which it is hoped could mitigate the impact of the tariffs will continue, Sir Keir said as he promised to “fight for the best deal for Britain”.
But he said he would “only strike a deal if it is in the national interest and if it is the right thing to do for the security of working people”.
Sir Keir said that “as with defence and security, so too for the economy and trade we are living in a changing world, entering a new era” and “we must rise to this challenge”.
The Government will act “with pragmatism, cool and calm heads, focused on our national security”, he vowed.
