Trade war: What to know about UK’s retaliatory plans against Trump’s tariffs

The UK is taking a firmer stance against the new US tariffs, signaling a shift in its approach to trade tensions. 

The government has announced a consultation with businesses to assess the impact of potential retaliatory measures, keeping all options open while negotiations with the US continue.

UK’s Response to the Tariffs

The US has imposed a 10% universal tariff on all UK exports, prompting concerns about its economic impact. Business Secretary Jonathan Reynolds confirmed that the government is considering countermeasures and has launched a formal request for input from businesses. 

The consultation, which runs until May 1, aims to gather feedback on “whether the UK should impose rebalancing measures in response to the 10% US tariff on UK steel and aluminum products and, if so, how these measures should be structured.” 

The government will also develop an indicative list of US products that could face UK tariffs as part of this process.

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Starmer’s Position on Trade Talks

Prime Minister, Keir Starmer has taken a measured approach, emphasising that a trade war benefits no one. 

He stated that talks with the US are making “good progress” and that the UK is “not ruling anything out at this stage” regarding its response. 

While avoiding direct confirmation of specific measures that may be included in the upcoming autumn statement, he reassured that “all options remain on the table.”

Economic and Political Considerations

The government’s move signals a shift from its previous hesitation to engage in direct confrontation with the US. Business groups have generally supported a cautious approach, wary of escalating tensions. 

However, the UK is also under pressure to protect domestic industries, especially after Reynolds described the US tariffs as “unjustified and unfair.”

Potential Impact on Consumers and Businesses

The tariffs could raise costs for UK exporters, leading to inflationary pressures and job losses in key industries such as manufacturing. 

At the same time, supply chains may shift to alternative markets, potentially bringing cheaper goods into the UK. The government’s decision on retaliatory tariffs will play a critical role in shaping future trade relations and determining the broader economic effects of the US measures.

For now, the UK is balancing diplomatic engagement with the US while keeping all options open to protect its economic interests.

(BBC)

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