Donald Trump and Keir Starmer (Image: Getty)
Sir Keir Starmer is desperately scrambling to stop Donald Trump’s latest tariff assault inflicting more damage on the UK economy. The US President has said he will impose global tariffs of 15%, as he has continued to rail against a Supreme Court ruling that struck down his previous import taxes.
Mr Trump initially said he would be imposing a new 10% global levy – but then upped that to the maximum allowed under a never-used trade law. The tariffs are allowed to stay in place for around five months before the administration must seek congressional approval.
Bridget Phillipson (Image: Getty)
Businesses warned the move means many will face higher tariffs than before the intervention by the American legal system, as the rate previously applied to the UK was 10%.
British officials hope the changes will not affect preferential arrangements the Prime Minister negotiated on steel, cars and pharmaceuticals, but the situation remains unclear.
The US administration is also threatening to step up pressure for the UK to make concessions on chlorinated chicken, pharmaceutical costs and tech firms.
Education Secretary Bridget Phillipson insisted talks are taking place between the UK and US at the “very highest level” but didn’t rule out retaliatory tariffs.
“We will always stand up for British interests,” she told Sky News, adding that it needs a “nuanced” approach.
The Education Secretary told Sky’s Sunday Morning With Trevor Phillips: “So we did secure a preferential deal.
“We, through the work that the Prime Minister has been leading in engaging with the US government and with President Trump, we would hope and expect that to continue, but these discussions are ongoing.
“This is an evolving situation. But of course, we want to get the best possible deal for British businesses.
“I understand the uncertainty it does cause for them, but they can be assured that we will always be working to make sure they get everything that they need.”
Donald Trump (Image: Getty)
She added: “You talked about the approach in whether you take a hard approach or a more nuanced approach … it has to be a combination of all of those things, but in reality you get more done when you are prepared to have serious conversations, often not in front of cameras or out there in the public, but actually behind the scenes, working closely between governments, and we do have a really strong relationship with the US.
“That is something that is not about one president or one prime minister, it’s about that long-standing and enduring relationship that is right for our country and right for national security, and also really important at a time when we see significant global instability that we work together on those key questions like defence.”
William Bain, head of trade policy at the BCC, said: “We had feared that the President’s plan B response could be worse for British businesses and so it is proving.
“This means an extra 5% increase in tariffs on a wide range of UK goods exports to the US, except those covered under the Economic Prosperity Deal.
“This will be bad for trade, bad for US consumers and businesses and weaken global economic growth. Businesses on both sides of the Atlantic need a period of clarity and certainty. Higher tariffs are not the way to achieve that.”
Paul Ashworth, chief North America economist for Oxford Economics, told the Telegraph: “For the UK that thought it had secured a more advantageous 10 per cent rate this is something of an eff you.”
Mr Trump used “emergency powers” to introduce the reciprocal tariffs in April, but that was ruled illegal by the Supreme Court.
He has signed a presidential order to reinstate the global levies, but must get approval from Congress within 150 days.
The UK Government said it expects Britain’s “privileged trading position with the US” to continue despite the 15% rate.
A spokesman said: “This is a matter for the US to determine but we will continue to support UK businesses as further details are announced.
“Under any scenario, we expect our privileged trading position with the US to continue and will work with the administration to understand how the ruling will affect tariffs for the UK and the rest of the world.”
In his post on Saturday, the US President said: “Based on a thorough, detailed, and complete review of the ridiculous, poorly written, and extraordinarily anti-American decision on Tariffs issued yesterday, after MANY months of contemplation, by the United States Supreme Court, please let this statement serve to represent that I, as President of the United States of America, will be, effective immediately, raising the 10 per cent Worldwide Tariff on Countries, many of which have been ‘ripping’ the U.S. off for decades, without retribution (until I came along!), to the fully allowed, and legally tested, 15 per cent level.”