The UK will not hesitate to retaliate against US tariffs if necessary, according to sources from Downing Street. The government is engaged in last minute negotiations with the White House ahead of a planned 25% tax on car imports and potential broader tariffs on other goods, set to take effect on April 2. UK officials are pushing for an exemption, arguing that the country maintains a relatively balanced trading relationship with the US. Prime Minister Sir Keir Starmer has stated that he does not want to escalate tensions into a full-scale trade war.
US President Donald Trump has introduced a series of tariffs on foreign goods, claiming the measures will benefit American manufacturers and protect jobs. However, critics warn that these tariffs could drive up prices for consumers and disrupt supply chains. Businesses in the US will face the new charges on imported vehicles starting April 3, with additional taxes on auto parts expected to follow in May or later. Government sources indicate that negotiations for a UK exemption will continue beyond Trump’s deadline, with one official stating, “We won’t stop trying.”
If the tariffs are enforced, it remains unclear how the UK might retaliate. Potential responses include duties on sectors where British products are crucial to US markets or targeted levies on specific goods such as Harley Davidson motorcycles. Experts suggest that an extreme though unlikely option would be imposing restrictions on financial services. Despite the warnings, UK ministers are keen to avoid a trade war. Sir Keir Starmer emphasized earlier this week that the government remains committed to intense negotiations, stating they would approach the situation with “pragmatism and a clear-eyed view.”
The independent Office for Budget Responsibility has cautioned that a reciprocal trade conflict could shave billions off UK economic growth, potentially undermining the chancellor’s ability to adhere to fiscal rules. Dame Meg Hillier, chair of the Commons Treasury Select Committee, warned that the UK’s commitment to free trade would face significant challenges in the coming weeks due to Trump’s tariffs.
Trump has defended the 25% levy, claiming it will generate “tremendous growth” for the US auto industry by boosting jobs and investment. However, concerns remain that the move could lead to temporary factory shutdowns, increased costs, and strained diplomatic relations with allies. The US imported approximately eight million cars last year—valued at around $240 billion (£186 billion)—accounting for roughly half of total car sales. Mexico is the top supplier of vehicles to the US, followed by South Korea, Japan, Canada, and Germany. UK car exports to the US amount to around £7.6 billion annually, making it the second-largest market for British-made cars after the European Union.
The Society of Motor Manufacturers and Traders (SMMT) described Trump’s announcement as “not surprising but, nevertheless, disappointing.” World leaders swiftly condemned the new tariffs. German Economy Minister Robert Habeck urged the European Union to “respond firmly,” while French President Emmanuel Macron dismissed the move as a “waste of time” and called on Trump to reconsider.
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