The UK’s foreign secretary David Lammy has said Britain is “preparing for the worst”, after Downing Street admitted Britain would be hit by Donald Trump’s looming tariffs.
Global markets have been rocked as the Trump administration prepares to unleash its so-called “Liberation Day” tariffs this week, with none of Washington’s trading partners expected to emerge unscathed from import taxes anticipated by Goldman Sachs to average 15 per cent.
If the situation escalates into a full-scale trade war, it could cost the global economy $1.4trn, the Aston Business School estimates.
Speaking after business secretary Jonathan Reynolds insisted no country was “better placed” than the UK to strike a deal with Washington, Mr Lammy told MPs: “It’s hugely important at this time that we continue the intense conversations we’re having with the US administration on getting an economic agreement.
“But of course we prepare for the worst – all options remain on the table.”
Goldman Sachs warned on Tuesday that, even with a US deal, the UK’s economy is still expected to suffer a greater hit than previously anticipated.
Trump signs off Keir Starmer’s controversial Chagos Islands deal
While Sir Keir Starmer may have failed to avert looming US tariffs hitting the UK, there was better news for the UK government as No 10 announced that Donald Trump has formally signed off Keir Starmer’s deal to hand the Chagos islands over to Mauritius.
The agreement is now being “finalised” between the UK and Mauritius, Downing Street said.
Kate Devlin and David Maddox have more details in this report:
The UK government’s approach to seeking an economic deal with Donald Trump is “not about sucking up to anyone”, the business secretary has insisted.
Jonathan Reynolds told BBC Radio 4’s Today programme: “Standing up for the country, doing a strong response to this, is about pursuing your own national interest – and the UK’s national interest is in reaching an agreement.
“We have things available to us that are not available to other countries, and that’s because the existing UK-US trading relationship is a fair and balanced one – the US does not have a significant deficit in traded manufactured goods, which is so much a part of their thinking.
“So there are things available to us. It’s not about sucking up to anyone. It’s not about not responding. It’s about pursuing our national interest – that is what the government is doing.
“And whilst there is a chance of delivering that, I think that is the right approach.”
Starmer asked if he feels ‘played’ by Trump over tariffs
Asked if he had been “played” by Donald Trump as it appeared that efforts by Sir Keir to build a good relationship had failed to protect the UK from tariffs, the prime minister told Sky News: “The US is our closest ally.
“Our defence, our security, our intelligence are bound up in a way that no two other countries are.
“So it’s obviously in our national interest to have a close working relationship with the US, which we’ve had for decades, and I want to ensure we have for decades to come.”
Trump tariffs will impact UK economy, chancellor tells Cabinet colleagues
Donald Trump’s tariffs will have an impact on the UK economy, chancellor Rachel Reeves has told her fellow Cabinet ministers.
Ms Reeves told this morning’s Cabinet meeting that “global tariffs will have an impact on the UK as an open trading economy”, but said that “securing a deal could mitigate some of those effects”.
Badenoch backdrop mocked as Tory woes overshadow press conference
The Conservatives’ have drawn mockery after Daily Mail’s political editor compared the backdrop used for Kemi Badenoch’s speech to an abandoned mattress.
Sharing the image, Labour joked that “the DFS sale starts earlier every year”, while the Lib Dems wrote: “We thought the Tories were against fly tipping?”
Attending the press conference, The Independent’s political correspondent Archie Mitchell wrote that the event felt like “a sign of how badly the party is struggling”, with the party’s lack of funds having “long been a talking point in Tory circles, with swathes of head office staff being made redundant to shore up the party’s finances”.
Noting that the venue at Tory HQ felt “more like a classroom than a venue for a major political party’s conference”, he wrote: “Not only could they not rent out a suitable venue to host journalists, they could not get a usually friendly think tank or donor to put them up in a more appropriate spot.”
US should recognise UK is a free country with liberal values, says Kemi Badenoch
Washington’s State Department should recognise that the UK is “a free country with liberal values”, Tory leader Kemi Badenoch has said – after US officials expressed concern over the prosecution of a British anti-abortion campaigner.
Ms Badenoch said that laws surrounding so-called “buffer zones” outside abortion clinics had been passed democratically and “we need to respect what Parliament votes for”.
The anti-abortion campaigner, 64, was on trial at Poole Magistrates’ Court last month, accused of breaching the Public Spaces Protection Order on two days in March 2023. The verdict will be delivered on Friday.
Consumers may be spared from Trump tariffs, experts say
UK consumers could be spared from price rises following Donald Trump’s tariffs but job cuts could worsen for some of the hardest-hit firms, experts say.
Mr Trump has imposed tariffs on UK aluminium and steel, and carmakers exporting to the US, in a bid to boost American production and protect home-grown manufacturers.
The tariffs could have a major impact on the country’s car industry because it could make it harder for UK businesses to sell to the US.
Economist Swati Dhingra, a member of the Bank’s Monetary Policy Committee (MPC), suggested that the inflation impact could be “less than feared”.
This is because the main goods that the US imports from the UK, including refined oil, were unlikely to see cost increases on account of tariffs.
Fellow economist and MPC member, Megan Greene, said tariffs could end up being “disinflationary”, meaning they help bring down the rate of overall price rises in the UK.
Chancellor has spoken with US counterpart ahead of Trump tariffs, Starmer’s Cabinet told
Chancellor Rachel Reeves has spoken to her US counterpart ahead of the expected tariffs ordered by Donald Trump.
Sir Keir Starmer’s Cabinet was told this morning that the chancellor spoke to US treasury secretary Scott Bessent on Monday, according to a No 10 readout of the meeting.
Sir Keir also updated ministers on the US tariffs expected this week in response to any decision from the White House.
No 10 rejects any link between Trump state visit and tariff talks
Downing Street suggested it is not right to draw a link between tariff negotiations and the invitation for Donald Trump to make a state visit to the UK.
Asked whether the invitation could be withdrawn if there is no deal, the PM’s official spokesperson said: “I wouldn’t draw any any link between the two. Obviously, the state visit is a matter for the Palace, as you know.
“You’ll have seen that the prime minister was delighted to extend His Majesty the King’s invitation for a historic state visit during his visit to to the White House.
“But when it comes to these talks, we’ll obviously continue to have these conversations. We’ll obviously continue them in the national interest, and we’ll obviously provide an update as and when we have one.”
No 10 says it cannot foresee scenario where free speech features in trade talks
Asked whether free speech laws would ever be on the table in negotiations over a US trade deal, the prime minister’s official spokesperson said: “The US is our closest ally, we’ll obviously talk to them about all areas of our relationship, as we do on security and defence, as we do on all issues that relate to US-UK special relationship.
“But when it comes to the trade talks, I think the business secretary said this morning he’s not aware of that featuring.”
Pushed on whether it could happen in the future, the spokesperson added: “I can’t see any context in which it would come up in trade negotiations or economic deal negotiations.
“Obviously, more broadly where we have discussions with the US on all issues that relate to our relationship, including areas of US concern, as well as UK concern, of course. But I can’t foresee a scenario where it features in trade and economic negotiations.”
