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Nobody would win a tit-for-tat trade war with the US when Donald Trump returns to power, Britain’s top international trade expert has warned.
An escalating tariff war with the Americans under Mr Trump would create “a very challenging market for us here in the UK” and British firms are increasingly concerned about the former president’s return, Marco Forgione, director general of the Chartered Institute of Export and International Trade, told The Independent.
During the election campaign, the Republican promised to implement 10 to 20 per cent tariffs on all goods coming into the country, rising to 60 per cent for those from China.
The levies would blow a hole in Britain’s exports to the US, at a time when demand for British goods is on the rise in the country.
Mr Forgione said: “These tariffs could reshape global trade and, if projections from the IMF are to be believed, wipe out the equivalent of the French and German economies combined from global GDP.
“The election result also comes at a time of rising demand for British food and drink brands among US consumers, according to new research that suggested UK products were seen as traditional, healthy and high quality when priced comparatively with US supermarket staples.”
Mr Trump has argued that the measures would bring manufacturing jobs back to the US, and that the Chinese and consumers from other countries would be left to foot the bill.
But Mr Forgione warned: “If you put a 20 per cent universal tariff on goods entering America, then it instantly becomes a very challenging market for us here in the UK and there are absolutely concerns about the implications of such a move.
“It would seem likely that there would be a response from the UK government and the truth is that nobody would win from getting involved in a tit-for-tat exchange of tariffs.”
Mr Trump’s victory over Kamala Harris in the US election has heightened calls for Sir Keir Starmer to immediately strengthen British ties with Europe.
Amid the prime minister’s ongoing post-Brexit reset of relations with the bloc, critics called for him to go further, faster, and rejoin the single market, customs union, and even the EU itself.
They fear that Britain will be left to fend for itself in an all-out trade war between the US and Europe – which has indicated it will retaliate against Mr Trump’s tariffs.
Liberal Democrat leader Sir Ed Davey said after Mr Trump’s win: “Families across the UK will also be worrying about the damage Trump will do to our economy and our national security, given his record of starting trade wars, undermining NATO and emboldening tyrants like Putin.
“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.”
Rachel Reeves has promised the UK will make “strong representations” to Mr Trump about plans for tariffs which could hit Britain’s economy.
The chancellor said she is not “sanguine” about the president-elect’s plans, but is “optimistic” about the UK’s ability to shape the global economic agenda.
Ms Reeves said the UK will use the months before Mr Trump’s inauguration in January to “prepare for different eventualities”.
Higher US import tariffs would reduce global economic growth by about one percentage point over the next two years, according to analysis from the National Institute of Economic and Social Research (Niesr).
For the UK, Niesr estimates economic growth would slow to 0.4 per cent in 2025, down from a forecast of 1.2 per cent.
