Meanwhile, the United Kingdom is considering retaliatory moves of its own against tariffs recently placed on them by the US. Last year, the UK exported almost £60 billion of goods to the U.S. Machinery, cars and pharmaceuticals were some of major exports. The prospect of new U.S. tariffs has caused widespread panic among UK businesses and government officials. These provisions include a 10% tariff on all UK imports and a massive 25% tariff on car exports and on steel and aluminum WaPo product.
The UK government has kicked off an intensive consultation process with UK businesses. They are particularly interested in determining the effect of new tariff retaliatory tariff action would have on such companies. This consultation is open for a period of four weeks, closing on May 1, 2025. Should a deal be reached with the U.S. government to mitigate or eliminate these tariffs, the consultation will be paused.
The UK government has repeatedly played up its right to act unilaterally if a deal cannot be reached. Current discussions between UK and U.S. officials aim to establish an economic deal that could alleviate some of the tariff burdens. Business Secretary Jonathan Reynolds stated, “We seek the views of UK stakeholders over four weeks until 1 May 2025 on products that could be potentially included in any UK tariff response.”
The trade dispute’s economic and political implications are far-reaching. Right now, many analysts are sounding the alarm about the UK’s economic growth prospects. Further, they project it might fall by as much as 1% if a trade war were to ratchet up. This latest downturn risks erasing the full £9.9 billion of economic headroom. Chancellor Rachel Reeves drew particular attention to this number in her Spring Statement.
It is the latter option the EU has chosen and they currently face a blistering tariff rate of 20%. By comparison, the UK’s cut to 10% has been touted by Brexit proponents as a great success of Brexit. Reynolds noted that the government’s approach has been validated: “It vindicated the pragmatic approach the government has taken.” Conservative shadow business secretary Andrew Griffith underlined the fact that the government derives no preferential benefits from these tariffs. He noted that the UK had joined over 125 other countries and territories in suffering these tariffs.
Critics of the government’s strategy have emerged. Liberal Democrat deputy leader Daisy Cooper warned against capitulating to U.S. President Donald Trump’s demands, stating, “If the government gives in to Trump’s threats it will only encourage him to use the same bullying tactics again and again.”