The Government has drawn up a list of US products that could be slapped with import taxes in retaliation against Donald Trump’s tariffs.
Business Secretary Jonathan Reynolds told MPs that businesses will be asked for their view on how they will be hit by any UK measures striking back at the US president’s global trade policy.
The Prime Minister has acknowledged there will be an economic hit for the UK from the 10% import tariff that has been put on British goods entering the US.
Ministers have said they will keep working towards a trade deal with the US, but Sir Keir Starmer stressed that “nothing is off the table” in terms of a response.
Addressing the Commons on Thursday, Mr Reynolds said: “It remains our belief that the best route to economic stability for working people is a negotiated deal with the US that builds on our shared strengths.
“However, we do reserve the right to take any action we deem necessary if a deal is not secured.
“To enable the UK to have every option open to us in future, I am today launching a request for input on the implications for British businesses of possible retaliatory action.
“This is a formal step, necessary for us to keep all options on the table.
“We will seek the views of UK stakeholders over four weeks until May 1 2025, on products that could potentially be included in any UK tariff response.
“This exercise will also give businesses the chance to have their say and influence the design of any possible UK action.
“If we are in a position to agree an economic deal with the US that lifts the tariffs that have been placed on our industries, this request for input will be paused, and any measures flowing from that will be lifted.”
Mr Reynolds added: “Further information on the request for input will be published on gov.uk later today, alongside an indicative list of potential products that the Government considers most appropriate for inclusion.”
The US president unveiled tariffs on countries around the world on Wednesday night, with the UK’s 10% rate putting it in the lowest “baseline” category, but the Prime Minister acknowledged British exporters would be hurt by the levy.
Addressing senior executives from some of the UK’s biggest companies in Downing Street, Sir Keir said: “Clearly, there will be an economic impact from the decisions the US has taken both here and globally.”
He said that “nobody wins in a trade war” and stressed the UK had a “fair and balanced trade relationship with the US”.
Negotiations on an “economic prosperity deal” which it is hoped could mitigate the impact of the tariffs will continue, Sir Keir said as he promised to “fight for the best deal for Britain”.
But he said he would “only strike a deal if it is in the national interest and if it is the right thing to do for the security of working people”.
There was a degree of relief in the Government when the 10% rate applied to the UK was less than that applied to other nations.
The EU is facing tariffs of 20%, while Japan’s tariff rate is 24%.
The UK exported £60.4 billion of goods to the US in 2023, around 15% of all goods exports.
While the blanket 10% tariff will come into effect on Saturday, the car industry has already been hit with a 25% import tax which began in the early hours of Thursday morning.
The FTSE 100 Index dropped sharply on opening on Thursday, falling 122.4 points, or 1.4%, in the first few minutes of trading.
Mr Trump said the tariffs were “reciprocal” in response to levies imposed by other nations, but it is not clear how the 10% figure was arrived at for the UK.
The president also highlighted “exorbitant” rates of VAT as something which impedes US firms in their trading, even though the tax applies to purchases in the UK regardless of where the goods come from.