Britain could hit the US with retaliatory tariffs after Donald Trump slapped levies of 10 per cent on British goods entering the US.
Business Secretary Jonathan Reynolds told MPs that ministers will look at “possible retaliatory action” if the UK could not strike a trade deal with the US president.
Ministers will publish on Thursday a list of “potential products” they could target in any fight back , he said.
Mr Reynolds, who set a deadline of early May for the consultation, also told the House of Commons any action would be “paused” if a deal was struck.
No 10 denied the month-long exercise meant they were dithering, while Keir Starmer brushed off suggestions he should “jump straight into a trade war” with the US, describing this as “a really important moment”.
“That is why we are sensibly doing what is necessary,” Sir Keir said at Labour’s local elections launch in the Midlands.
Earlier, Mr Reynolds insisted “America is a friend” despite the tariffs, due to come into force this weekend.
Hours after the US president ushered in a new era for global trade and accused foreign countries of “ripping off” America, he said he was “disappointed” by the levies, but insisted: “America is a friend, America is our principal ally.
“Our relationship is an incredibly strong economic one, but also a security one and a political one as well.”
Earlier, Australian prime minister Anthony Albanese said Mr Trump’s decision to slap tariffs on his nation, at the same level as the UK, was “not the act of a friend”.
In a sign the UK is still hopeful of a US trade deal to solve the tariff problem, Sir Keir defended the US president’s announcement, saying that Mr Trump was “acting for his country… and that is his mandate”. Acknowledging that “clearly, there will be an economic impact” from the tariffs, the PM said “today, I will act in Britain’s interests with mine”.
Mr Trump has said his “Liberation Day” announcement, which threatens a devastating global trade war, is a “declaration of economic independence”.
European Union nations face 20 per cent penalties while China will pay 34 per cent and Cambodia an eye-watering 49 per cent. Switzerland was also hit hard with 31 per cent. Taiwan, which is struggling for survival against threats from China, faces 32 per cent and India is getting 26 per cent.
While Britain was spared the worst of the tariffs, Mr Reynolds, who has led trade talks with the US aimed at securing a carve-out for the UK, warned against viewing the lower rate as a post-Brexit win.
“I think anyone trying to use this to fight the kind of perennial historical political debates in the UK has missed the point,” Mr Reynolds told Times Radio.
He added: “This is … a really significant change to how the global trading system operates and the US’s role within it.
“Of course, I’m happy that we in the UK can set our own specific trade policy in our own interests, that’s important to me, and an important way of how we are handling these issues.
“But, look, this is much bigger than the UK’s relationship to the European Union and we’ve got to recognise that.”
The business secretary repeated his insistence that Britain is acting with a cool head and has been urged by business leaders not to immediately retaliate.
Mr Reynolds said the UK must keep “every tool available” as it looks for ways to respond, but said he would “remain engaged while there is the potential for a deal”.
Talks are ongoing and Mr Reynolds has said Britain is the best placed country in the world to negotiate its way out of the dispute with the US.
After days of build up the US president waited for markets to close to make his big announcement in the Rose Garden of the White House as he promised “to make America wealthy again”.
He said: “April 2nd 2025 will forever be remembered as the day American industry was reborn. America’s destiny was reclaimed and the day that we began to make America wealthy again. For decades, our country has been looted, pillaged, raped and plundered by nations near and far, both friend and foe alike.
“Americans really suffered gravely. They watched in anguish as foreign leaders have stolen our jobs, foreign cheaters have ransacked our factories and foreign scavengers that have torn apart our once beautiful American dream.
“Our country and its taxpayers have been ripped off for more than 50 years, but it is not going to happen anymore.”