Despite Britain being offered one of the lowest  tariff rates among US President Donald Trump's global slew of import levies, UK officials believe he is still open to negotiations that could bring it lower. Senior Trump administration officials have told Bloomberg that US negotiations were likely to concentrate on the countries it had hit with higher rates.

But Bloomberg also reported that the US had not "completely shut down the idea of going below 10%" so it was worth trying to negotiate, UK officials said. The UK Government still hopes for an economic deal with the US to secure some exemption from the tariffs, with PA reporting that Prime Minister Sir Keir Starmer had promised businesses he would “fight for the best deal for Britain”.

UK officials see two camps in the US admin according to Bloomberg: one which wants permanent tariffs on all nations, and another which prioritises negotiating policy changes. Ultimately it’ll be Trump’s call, they said.

If Trump decides on a permanent 10% baseline, the UK could try to negotiate down the 25% tariffs on cars and steel, they said.

Trump was reported as saying Starmer is “very happy about how we treated them on tariffs.”

UK ministers have insisted they will respond with “cool and calm heads”, but are keeping all options open, including the possibility of retaliatory tariffs on a range of American goods.

An “indicative list” published by the Government showed products that could be targeted, including bourbon whiskey, motorcycles, guitars and jeans.

But an immediate response is unlikely as Trade Secretary Jonathan Reynolds told MPs he would hold a four-week consultation on retaliatory action.

Even with a deal, however, the global impact of Wednesday’s tariffs is expected to cause a significant economic shock to the UK.

The economic impact of the tariffs could already be felt, with stock markets tumbling around the world.

Thomas Pugh, economist at RSM UK, said he believed the tariffs would be “not far off” wiping out Chancellor Rachel Reeves’s fiscal headroom by the time she announces her second budget in the autumn.

Last week, the Office for Budget Responsibility warned that Ms Reeves’s headroom against her debt target would be at serious risk if tariffs were imposed.