A waiting game on tariffs is beginning to play out between the UK and the United States on tariffs, amid warnings that Donald Trump’s latest strategy could hit the UK especially hard.
The US president on Thursday revealed he has asked his government to consider what tariffs should be applied to other nations – and to include the VAT applied to US goods in those countries in the calculations.
It is the latest step in Mr Trump‘s attempts to bring production back to the US and charge other nations for access to the American market. He has asked for a report to be completed by April.
Politics latest: UK won’t ‘overreact’ to Trump tariff announcement
Chancellor of the Duchy of Lancaster Pat McFadden told the Politics Hub with Sophy Ridge the UK was waiting to see how it would react.
He told Sky News: “Sometimes tariffs are announced, a couple of days later, they are unannounced.”
Mr Trump’s latest announcement was made just before Mr McFadden spoke to Sky News.
Sir Keir Starmer also spoke to Mr Trump on Thursday afternoon by phone, with a Downing Street spokesperson saying the conversation happened during a meeting between the prime minister and the president’s special envoy to the UK, Mark Burnett.
Mr Burnett and Sir Keir “emphasised the huge potential for even stronger collaboration on trade, tech and cultural matters between the US and the UK”, the spokesperson added.
Kemi Badenoch, the leader of the Conservative Party, urged Sir Keir to reopen trade negotiations with the US to secure a agreement that would avoid tariffs.
Paul Ashworth, the chief North America analyst at Capital Economics, estimated that the UK would be the fourth most impacted country if Mr Trump’s regime imposes the minimum WTO tariffs across the board added to each nation’s VAT rate.
India would get a 29% tariff, Brazil a 28% rate, followed by the EU on 25% and then the UK on 24%.
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‘We won’t overreact’ to US tariffs
The Trump administration is also looking at subsidies, “burdensome regulatory requirements” on US businesses and restrictions on animal and plant products.
This could include the UK’s food safety regime that has seen US chlorine-washed chicken prevented from being sold in Britain.
Mr McFadden told Sky News that the government policy is not to react to every announcement Mr Trump makes.
“We took the decision… that we wouldn’t breathlessly chase every headline that was coming out over the last month,” he said.
“I think that’s the right decision.”
Mr McFadden added: “We will always stand up for the national interest, it’s a government’s duty to do that, but the best thing in the national interest is to maintain a good trading relationship with everybody that we need to maintain that with, right across the world.”
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Speaking to Sky News on Friday morning, Science Secretary Peter Kyle said: “We will assess any changes and challenges that come down the line from any part of the global economy, and we will act appropriately in the best interest of Britain.”