UK Braces for Impact
SIR Keir Starmer was last night braced for the UK to take an instant hit in Donald Trump's global trade war. No10 was preparing for the worst, with 20 per cent tariffs expected to be slapped on all imported goods after efforts to charm the President failed.
Immediate Effect on Economy
The White House said the charges would come into effect immediately once they were announced today. Britain will then engage in more frantic diplomacy to get some or all of the tariffs lifted, amid fears they will batter economic growth and wipe out the Government's £10billion financial cushion.
Political Responses
Foreign Secretary David Lammy told MPs Britain was "preparing for the worst." He said all options remained on the table but No10 was not expected to retaliate immediately by imposing tariffs on the US. PM Sir Keir said he would not resort to knee-jerk tactics but make a "calm and collected response."
Possible Implications
Experts say that Chancellor Rachel Reeves' headroom revealed at last week's Spring Statement could be obliterated if tariffs were kept in place for the rest of the decade. Analysis from the Institute for Public Policy Research (IPPR) suggested tariffs on car imports would put 25,000 UK jobs at risk and "completely destabilise the UK car manufacturing industry."
Negotiating for Solutions
Although a deal is unlikely to be reached before Mr. Trump's announcement, UK negotiators are reported to be pursuing an agreement with the US focused on technology. Such a deal is said to include possible changes to the digital services tax in exchange for a carve-out from the tariffs.
Uncertainty Looms
Ministers have refused to deny that changes to the digital services tax are being considered. Treasury minister James Murray said that he would not give a "running commentary" on negotiations, emphasizing the "principle" of businesses paying their fair share.
