Sir Keir Starmer has vowed to “keep a cool head” in the face of the “economic impact” of Donald Trump’s 10 per cent tariffs on UK exports to the US, amid fears of a wider trade war.
The Prime Minister spoke to business chiefs in Downing Street this morning in the wake of sweeping global import taxes announced by the US President at the White House last night.
Trump imposed a rate of 20 per cent on the European Union (EU), 24 per cent on Japan and 34 per cent on China, among a wide range of others, in a speech hailing America’s “declaration of economic independence”, pledging to make the US “wealthy again”.
However, James Knightley, chief international economist at ING, warned of “sharply higher costs for US importers” and “price increases through the supply chain”.
He cautioned that prices could rise by “around 2.5 per cent or $1350 of extra cost for every American” amid wider economic “fears of stagflation” in the US.
Sir Keir told bosses at No10: “Last night the President of the United States acted for his country, and that is his mandate.
“Today, I will act in Britain’s interests with mine.”
UK ‘economic impact’
Starmer stressed that as the government moved “to the next stage of our plan”, the “decisions we take in coming days and weeks will be guided only by our national interest, in the interests of our economy, in the interests of businesses around this table, in the interests of putting money in the pockets of working people”.
“Nothing else will guide me, that is my focus,” he said.
On the impact the tariffs would have, he admitted: “Clearly, there will be an economic impact from the decisions the US has taken, both here and globally.
“But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head.”
Starmer said he would “fight” to secure a deal with the US in the hope of mitigating the impact of the tariffs.
Addressing business chiefs including AstraZeneca’s Pascal Soriot, BAE’s Charles Woodburn and Jaguar Land Rover’s Richard Molyneux, the Prime Minister said: “Nobody wins in a trade war, that is not in our national interest.
“We have a fair and balanced trade relationship with the US.
“Negotiations on an economic prosperity deal – one that strengthens our existing trading relationship -they continue and we will fight for the best deal for Britain.”
He said he would only strike a deal with Trump’s White House “if it is in our national interest and if it is the right thing to do for the security of working people, protects the pound in their pocket that they have worked hard to earn”.
And the PM said “we are living in a changing world, entering a new era”, as he stressed: “Our intention remains to secure a deal, but nothing is off the table.”
‘Lose-lose situation’
Susannah Streeter, from investment platform Hargreaves Lansdown, warned Trump’s “brutal” move was “sending a shiver through global markets.”
She said: “The UK may appear to have been dealt a better hand compared to some nations, but given it’s so intertwined with the global economy, a drag on growth looks inevitable.”
Last night, business lobby groups including the Confederation of British Industry (CBI), the Federation of Small Businesses (FSB) and the British Chambers of Commerce (BCC) warned of the impact of Trump’s tariffs on UK firms.
BCC director-general Shevaun Haviland said Trump’s imposition of tariffs is a “lose-lose situation for everyone” and urged the government to “continue to negotiate”.
She added: “This is a marathon not a sprint, and getting the best deal for the UK is what matters most. But no-one will escape the fallout… there will be an increased risk of trade diversion, and it will wreak havoc on businesses communities across the world.
“Many firms, especially SMEs, will now be facing difficult decisions and we urge government to do all it can to provide practical support to them.”
Business and trade secretary Jonathan Reynolds will give a statement on the situation to MPs in the House of Commons later today.