The UK government has been unequivocal on this. It will no longer be hurried into tit-for-tat action after the US earlier this month planned a 10% import duty on almost all UK goods coming into the US. The US, for example, has recently loaded a new 25% import tax on aluminium, steel and vehicles. Yet this unexpected move has caused large ripple effects of contemplation and significant debate within the UK administration about how to craft an effective response.
As our new shadow Chancellor Rachel Reeves said, we have to be pragmatic. She highlighted, “We must remain pragmatic, cool-headed, and pursue the best deal with the United States that is in our national interest.” The government aims to secure a trade deal that benefits the UK while navigating the complexities of ongoing discussions with the White House.
In an attempt to help UK companies win more business, the Chancellor is now seeing Whitehall procurement regulations. Requiring this review gives British businesses a competitive advantage in competing for government contracts. It illustrates and substantiates the government’s stated commitment to support and strengthen domestic producers. Specifically, big public sector infrastructure projects will be directed to favour British suppliers under this push.
Local Members of Parliament from across party lines lobbied Downing Street to launch a “buy British” campaign as a counter to President Trump’s tariffs. Much to their credit, Downing Street officially refused to support these changes. The Prime Minister’s official spokesman said that the government was not in the business of telling consumers where to buy their goods. The Prime Minister has promised a group of rebellious Tory MPs that the government is looking at retaliating against US tariffs, “if needed.” While supportive of the idea, he does not think the UK should “dive in headfirst.”
In February, UK’s government introduced new regulations to make it easier for small and medium-sized British firms to compete for government contracts. This action is yet another testament to their dedication to help their local businesses thrive. Yet when the last Chancellor appeared before the House of Commons Liaison Committee he focused on securing a deal that would mitigate the effect of tariffs. He maintained that this long-term strategy is much better than snap-back vengeance.
The political reaction to this crisis has been mixed. Daisy Cooper, the Liberal Democrat Treasury spokesperson, asserted, “Britain is not going to take Trump’s tariffs lying down.” This strong statement is indicative of a larger trend amongst political leaders—both elected and not—that a tougher approach is needed. Yet contrasting perspectives across Parliament speak to the challenge of uniting behind a unified approach in an effort to respond to fundamental external economic shocks.
As negotiations with the US continue, the UK government remains focused on its priority: securing a favorable trade deal. The forthcoming industrial strategy and public spending review, expected to be unveiled later this year, will provide further clarity on how the government plans to navigate these challenges while promoting British interests.