LONDON, April 4, 2025 – The UK government has signalled a significant hardening of its position in trade relations with the United States, threatening to impose retaliatory tariffs on a range of American goods unless a last-minute deal can be struck to reduce sweeping new tariffs imposed by President Donald Trump.
President Trump announced on Wednesday a fresh round of import taxes, including a 10% tariff on nearly all UK exports to the US, with a 25% levy on key industries such as cars, steel, and aluminium.
The move has prompted a sharp response from Downing Street, as ministers scramble to limit the damage to British exporters and protect the country’s economic interests.
Government Considers Countermeasures
Business Secretary Jonathan Reynolds told MPs on Thursday that the government was actively consulting with UK businesses about the potential impact of the tariffs and which US products should be targeted in return.
“If UK negotiators cannot agree a deal to reduce the 10% tariff by 1 May, the government will have no choice but to consider imposing retaliatory tariffs,” Reynolds said in the House of Commons. “We reserve the right to take any action we deem necessary if a deal is not secured.”
To prepare for such a scenario, the Department for Business and Trade has published a 417-page sample list of American goods that could face UK import tariffs.
These range from bourbon whiskey, firearms, and crude oil to pure-bred horses and children’s clothing. The list is not final, and Reynolds emphasized that being included does not necessarily mean a product will be subject to future levies.
The items were selected based on their economic impact—comprising about 27% of US exports to the UK—yet with “limited harm” to domestic industries, officials said.
Negotiations Ongoing, But Uncertainty Remains
Despite the confrontational rhetoric, Reynolds insisted that negotiations with Washington are ongoing.
“Our aim remains a mutually beneficial agreement. We are in close and continuous discussions with the US government to secure an economic deal that will reduce or eliminate these harmful tariffs.”
He did acknowledge, however, that the UK was relatively better off than some other allies.
“The fact that the US has put lower tariffs on the UK compared to other countries vindicates the pragmatic approach the government has taken,” he said. By contrast, EU nations are facing a 20% tariff under the new US rules.
But his comments sparked criticism from across the political spectrum. Conservative Shadow Business Secretary Andrew Griffith dismissed the idea that the UK had received special treatment.
“The government got no special favours,” Griffith told the Commons. “We are in the same tariff category as the Congo and the Christmas Islands. This is a wake-up call.”
Calls for Caution Amid Economic Risks
Former Chancellor Jeremy Hunt urged the government not to retaliate but to focus on making Britain more competitive.
In an opinion piece in The Telegraph, Hunt warned Prime Minister Sir Keir Starmer against the “siren song” of trade retaliation and advocated for turning the UK into a “Singapore-on-Thames”—a low-tax, highly competitive economy.
“Those who deride the idea of ‘Singapore-on-Thames’ fail to understand that the heart of their success has not been a harder-edged social policy but the building up of internationally competitive businesses through willingness to trade,” Hunt wrote.
However, analysts have warned that the stakes are high. The Office for Budget Responsibility (OBR), the UK’s official economic forecaster, has estimated that a worst-case trade war scenario could shave off 1% of the UK’s GDP growth.
Such an outcome would effectively wipe out the £9.9 billion in fiscal headroom Chancellor Rachel Reeves built into last week’s Spring Statement, possibly forcing tax rises or spending cuts.
Trump’s Justification and Posturing
President Trump, speaking aboard Air Force One, said he was open to negotiations but made it clear he expected concessions. “Every country has called us since the announcement,” Trump said. “That is the beauty of what we do—we put ourselves in the driver’s seat.”
He claimed that Prime Minister Starmer was “very happy on how we treated” the UK and suggested that any deal would have to be “something that is so phenomenal.”
Trump’s move is part of a broader strategy aimed at reshaping global trade. Alongside the UK, the EU, China, and other major economies are facing stiff new import duties. Many world leaders have reacted with alarm, calling the tariffs a “major blow” to international trade stability.
Tech Taxes and Agriculture at the Centre of Talks
Behind the scenes, UK officials say a trade deal with the US is close, though the final outcome remains uncertain. Any agreement would extend beyond simple tariff reductions, covering sectors such as technology, agriculture, and services.
One sticking point could be the UK’s Digital Services Tax (DST), which imposes a 2% levy on revenues earned by large tech firms operating in Britain—many of them American.
The tax brings in around £800 million a year. Chancellor Reeves has indicated that the government might consider changes to the DST as part of a wider trade negotiation package.
Agriculture remains another potential hurdle, given the history of difficult talks around US food standards and UK consumer protections.
Exports Under Threat
Last year, the UK exported nearly £60 billion in goods to the US, with machinery, pharmaceuticals, and cars being the top sectors. While some sectors—like pharmaceuticals and semiconductors—have been spared the new tariffs, others face significant pressure.
The automotive industry in particular stands to suffer under the new 25% tariff on car exports. Industry leaders warn this could jeopardize thousands of jobs and reduce the UK’s competitiveness in a vital market.
Outlook: High Stakes Ahead
The coming weeks will be critical. If no agreement is reached before the May 1 deadline, retaliatory tariffs may further escalate tensions, and businesses on both sides of the Atlantic could suffer.
With trade talks continuing and political pressure mounting, the UK faces a delicate balancing act—asserting its sovereignty and defending its economy while seeking a compromise with an unpredictable American counterpart.
For now, businesses are left waiting, watching, and preparing for the fallout of a trade war that is still just on the horizon—but inching ever closer.
This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members
