The United Kingdom is still smarting from recently imposed tariffs by the United States as President Donald Trump announced the tariffs early in 2019. At first, the UK government expected to be free of any such tariffs, notably the UK’s 10% tariff on all countries. The ground is shifting quickly, though. The UK is currently engaged in negotiations with the US over a bilateral trade deal that may very well open the purse strings further.
The tariffs have been imposed against a backdrop of engagement between UK negotiators and their US counterparts. The UK government repeatedly lobbied to preemptively avoid the imposition of these exact tariffs. They had reason for an optimistic expectation of an exemption. As the negotiations continued, UK officials did everything within their power to secure the best deal. They were ably led by Michael Ellam and Varun Chandra in these efforts.
In the weeks leading up to the announcement, the UK was proactive in addressing concerns among businesses about the potential for tariffs. Other reports suggest that companies were under a lot of duress—counseled by advisors to brace for the effects of tariffs.
“is because we got people into the headspace where tariffs were going to happen – one of the businesses said they were being borderline stalked, we’ve been trying to persuade business to trust the process.” – A source
Even after the US decided to impose tariffs, the UK government has refused to retaliate with its own tariffs. Authority officials are focused on developing an initial agreement on principles with the US. This foundational work will help create space for more substantive negotiations in the future.
As one minister made clear, a lot of MPs have very important jobs on the line in their constituencies. He acknowledged that even inside the cabinet, any uncertainty had dissipated over the course of this week, pointing to the need for job security as these exciting developments unfolded.
For weeks now, the UK has been negotiating very aggressively with the US. State officials have been anxious to settle. We are poised to receive a word from them at any second,” said one of the stakeholder’s participants in the negotiations. The administration is under increasing pressure from the public and Congress to get a deal done. This agreement would go a long way toward offsetting some of the economic burdens created by the new tariffs.
The UK’s approach seems to be that of optimistic caution. Commentators have warned that any deal struck would probably need to be focused on general principles rather than specific, dogmatic details.
“It would be a basic agreement on principles – rather than a super detailed trade agreement,” – A government source
This strategy underscores a desire to maintain a working relationship with the US while navigating the complexities of international trade. In retaliation for US tariffs, China has imposed their own corresponding tariffs. Consequently, the world’s trade landscape has undergone a massive transformation.
Many high-level negotiators have voiced their annoyance with the pace of talks, indicating that negotiators are already very late in the game.
“We’re on our 15th chapter with them!” – A government source
There are enormous challenges, but considerable opportunity for the UK government’s current moment. First and foremost, the tariffs are an immediate challenge. One thing’s for sure – we remain committed to pushing a better alternative that truly maintains jobs and builds a more stable economy.
As negotiations continue, everyone hopes that a deal can be struck quickly. It’s high stakes for lawmakers, but not only them. Those who are counting on the continuity of firm, stable trade relations with the US are equally shaken.