The cost of products made in the US is set to increase in the UK as officials actively consider responses if Donald Trump includes the UK in his global tariff initiatives.
The US President has pledged to impose a sweeping 20 percent tariff on imports to the United States, taking effect on April 2.
This week, Trump declared that tariffs would apply to all imported vehicles, a move expected to significantly impact British luxury car manufacturers such as Rolls-Royce and Aston Martin.
Officials from No10 and Business Secretary Jonathan Reynolds have been advocating for an exemption for the UK from these protectionist actions.
However, faced with a lack of progress, ministers indicate they may respond with their own tariffs on US imports as soon as this week.
Popular items that could be affected include Jack Daniel’s whiskey, Levi’s jeans, and Harley Davidson motorcycles.
A UK source informed the BBC that the government is considering a ‘nuclear option’ targeting US financial services.
Home Secretary Yvette Cooper stressed the Prime Minister’s stance that ‘no option is off the table’ with regard to responding to the tariffs.
The US President has vowed to lash out against friend and foe alike on April 2 with a general 20 percent levy on goods imported into the United States.
Without any sign of success ministers say they could bring in their own tariffs on US imports this week, affecting goods like Jack Daniel’s whiskey, Levi’s jeans, and Harley Davidson motorcycles.
Home Secretary Yvette Cooper reiterated the Prime Minister’s message that ‘no option is off the table’, regarding the response to the tariffs.
Discussions with the US about exemptions from the proposed tariffs are currently ‘intense’, she mentioned in a Sky News interview.
Ms. Cooper added: ‘We cannot provide a running commentary on ongoing discussions, but we must always ensure our actions are in the national interest.’
When asked about the potential damage of these tariffs, the Home Secretary replied: ‘Increasing trade barriers globally is detrimental not just for individual countries but for the global economy as a whole.’
‘This is why our strategy focuses on establishing new trade agreements worldwide, improving our trading relationship with both the EU and the US.’
The implementation of new trade taxes follows Rachel Reeves’ announcement of spending cuts during the spring statement to create a narrow buffer for her public spending plans.
The Office for Budget Responsibility, which oversees government spending, has cautioned that the tariffs could eliminate any chances of economic growth.
Furthermore, the Institute for Fiscal Studies has stated that Ms. Reeves’ £9.9 billion fiscal room, considered quite limited by historical standards, may be adversely affected by uncontrollable global events.
