Amid escalating global trade tensions, Prime Minister Sir Keir Starmer has pledged to shield British businesses from the impact of new US tariffs imposed by President Donald Trump. Writing in the Sunday Telegraph, Starmer announced plans to use industrial policy to protect the national interest while still seeking a viable trade deal with the United States.
New US Tariffs Trigger Global Concerns
This week, the US imposed a 10% baseline import duty on several countries, including the UK. In addition, certain sectors such as UK car exports, steel, and aluminium were hit with a hefty 25% tariff, with some nations facing duties as high as 50% starting April 9, 2025.
President Trump stated the tariffs were aimed at encouraging US consumers to buy domestically-made products. However, the move has triggered fears of a global recession, with markets dipping by more than 5% in reaction.
One immediate consequence came from Jaguar Land Rover, which announced a temporary pause on shipments to the US, citing the need to reassess trade terms.
UK Government’s Response Plan
In response, Sir Keir pledged to “turbocharge” domestic industrial plans to make the UK more resilient to global economic shocks. While reaffirming his intention to pursue a trade deal with the US, he emphasized that “all options remain on the table” if negotiations fail.
“We stand ready to use industrial policy to help shelter British business from the storm,” Starmer wrote, acknowledging that state intervention in markets might be uncomfortable for some but necessary in a rapidly evolving world.
Industrial Strategy and Potential Tax Changes
Starmer confirmed that elements of Labour’s upcoming industrial strategy, initially scheduled for release in summer, could be brought forward to assist affected businesses. He also hasn’t ruled out further tax increases in the autumn, although the Spring Statement refrained from any hikes.
Retaliatory Tariffs Under Review
The UK government has also released a 400-page list of US goods potentially subject to retaliatory tariffs, covering about 27% of imports from the US. Business Secretary Jonathan Reynolds assured that businesses would be consulted to ensure minimal domestic disruption.
Seeking Broader Trade Diversification
Beyond the US, Starmer highlighted plans to reduce trade barriers with other global economies to mitigate dependence on any single trading partner. This move aims to provide long-term economic insulation for UK exporters.
In his call with French President Emmanuel Macron, both leaders expressed that a trade war serves no one, yet agreed that “nothing should be off the table” in protecting national interests.
Political Reactions and Domestic Impacts
Conservative leader Kemi Badenoch urged the prime minister to negotiate a trade deal that maintains standards while driving growth. Meanwhile, critics from both the Conservatives and Liberal Democrats have pointed out that UK employers are already feeling the burden of the new National Insurance hike, which took effect today.
Conclusion
As tariff tensions escalate and global markets react, the UK government appears determined to balance diplomacy with strategic intervention. Prime Minister Keir Starmer’s approach—combining trade talks, industrial policy, and readiness for direct action—signals a proactive stance to safeguard UK businesses and economic stability.
FAQs
What tariffs has the US imposed on the UK?
The US has applied a 10% baseline tariff and a 25% tariff on car, steel, and aluminium exports from the UK.
What is the UK doing in response to the tariffs?
The UK is seeking a trade deal with the US while preparing to implement retaliatory tariffs and fast-tracking industrial policy.
Will UK businesses receive government support?
Yes, the government is planning to roll out industrial strategies and potentially intervene to protect key sectors.
Is there a risk of a trade war?
While leaders like Starmer and Macron stress that a trade war is not ideal, they agree that all options must remain open.
How will these tariffs impact everyday citizens?
Tariffs may lead to price increases and affect jobs, while the new National Insurance hike adds financial strain on employers.
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Aanchal is a passionate writer with a keen interest in storytelling, content creation, and creative expression. She enjoys exploring diverse topics and crafting engaging narratives that captivate readers.