Donald Trump’s plans to impose huge tariffs on imports are a “doomsday scenario” for the UK economy, a senior Labour figure has warned.
The move would hurt growth and lead to higher inflation and interest rates, Liam Byrne, the Labour chairman of the Commons business committee predicted.
Experts have warned of a looming trade war after Mr Trump himself said: “Tariff is my favourite word”.
In the run-up to the election, the Republican promised to implement 10 to 20 per cent tariffs on all goods coming into the country, a figure that rises to 60 per cent for those from China.
Already there have been warnings the change could halve UK economic growth, from the National Institute of Economic and Social Research think tank.
Mr Byrne told the BBC’s Today programme the move was “the Doomsday scenario we are now confronting”.
“If that does go ahead that is going to have a really significant impact on growth, inflation and interest rates on the UK,” he added.
The British government should appeal to Mr Trump’s fears over US defences and security when it comes to China, he said, and argue that higher duties mean weaker defences.
Lord Darroch, the former US ambassador, said he expected Mr Trump to “go big” on tariffs, adding: “I think it will be quite a challenge for the UK. I don’t see any special deal coming for the UK.”
Last week Britain’s top international trade expert warned that no-one would win a tit-for-tat trade war with the US when Mr Trump returns to power.
An escalating tariff war with the US would create “a very challenging market for us here in the UK” and British firms are increasingly concerned, Marco Forgione, director general of the Chartered Institute of Export and International Trade, told The Independent.
The levies would hurt Britain’s exports to the US, at a time when demand for British goods is on the rise in the country.
The chancellor Rachel Reeves has promised the UK will make “strong representations” to Mr Trump over tariffs which could hit Britain’s economy. She is set to make the case for free trade during a Mansion House speech on Thursday.
Mr Trump’s victory has led to heightened calls for Sir Keir to immediately strengthen British ties with Europe.
Immediately after his win Liberal Democrat leader Sir Ed Davey said that fixing the UK’s “broken relationship with the EU is even more urgent than before. We must strengthen trade and defence cooperation across Europe to help protect ourselves from the damage Trump will do”.
Meanwhile, Dr Mike Galsworthy, chairman of European Movement UK, said: “If you needed yet another reason for the UK to join the EU – here it is.”