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UK explores retaliatory action against Trump tariffs UK drawing up list of items for potential retaliatory US tariffs
(about 3 hours later)
The UK government is launching a consultation with businesses on how taking retaliatory tariff measures against the US would impact them. Bourbon whiskey is among the US products that could face import taxes
It comes after US President Donald Trump announced new tariffs of 10% on all UK imports. The UK government is drawing up a list of US products it could hit with retaliatory tariffs after President Donald Trump announced a wave of new import taxes.
The government has previously said it would not be rushed into a knee-jerk response to Trump's imposition of tariffs on its trading partners around the world while insisting all options were on the table. This is a toughening of the government's stance as ministers seek to finalise a trade deal with the US.
But in a toughening of this stance, Business Secretary Jonathan Reynolds told MPs he would "seek the views of UK stakeholders over four weeks until 1 May 2025 on products that could be potentially included in any UK tariff response". Business Secretary Jonathan Reynolds says he is consulting UK firms about the likely impact of the 10% tariffs being imposed on all UK exports to the US and which products should be on the list.
He said talks were ongoing with the US government to secure an economic deal aimed at avoiding or reducing tariffs but warned that the UK "reserves the right to take any action we deem necessary if a deal is not secured". If UK negotiators can not agree a deal to reduce the 10% tariff by 1 May, the business secretary told MPs the government could impose retaliatory tariffs on US imports.
In the event of reaching a deal with the US, the consultation with businesses would be paused, he added.
Speaking in the House of Commons, he said the fact the US had put lower tariffs on the UK compared to other countries "vindicated the pragmatic approach the government has taken". However, he said he was "disappointed" by the increase.
Conservative shadow business secretary Andrew Griffith questioned Reynolds' claim that the government's approach had been "vindicated".
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"The government got no special favours," he said noting that the UK was facing the same tariffs as more than 125 other countries and territories including the Congo and the Christmas Islands. The government has published a sample list of goods that could face future UK tariffs.
He said the EU was being hit by 20% tariffs and the UK's lower rate of 10% was actually a vindication of those who "were pilloried and abused" for backing Brexit. Being on the 417-page list does not necessarily mean a product will face tariffs, the government said.
"They [Labour] should regret the 48 times they voted to stay in Europe and thank us for getting Brexit done." The list covers 27% of imports from the US - chosen because they would have a "more limited impact" on the UK economy, the Department for Business and Trade said.
Liberal Democrat deputy leader Daisy Cooper said Trump was telling the UK he would only lower tariffs "if you lower your standards". The products range from pure bred horses and children's clothes to crude oil, firearms and bourbon whiskey.
"If the government gives in to Trump's threats it will only encourage him to use the same bullying tactics again and again." Reynolds says talks are ongoing with the US government to secure an economic deal aimed at avoiding or reducing tariffs.
She reiterated her party's call for an "economic coalition of the willing" against the tariffs. But he warned that the UK "reserves the right to take any action we deem necessary if a deal is not secured".
In addition to the 10% tariffs, a 25% tariff has been put on UK car exports, as well as steel and aluminium products. In the event of reaching a deal with the US, the consultation with businesses would be paused, he added.
Speaking in the House of Commons, he said the fact the US had put lower tariffs on the UK compared to other countries "vindicated the pragmatic approach the government has taken".
However, he said he was "disappointed" by the increase.
Conservative shadow business secretary Andrew Griffith argued "the government got no special favours" - noting the UK was facing the same tariffs as the Congo and the Christmas Islands.
The EU was being hit by 20% tariffs and the UK's lower rate of 10% was actually a vindication of those who "were pilloried and abused" for backing Brexit, Griffith argued.
The UK exported almost £60bn worth of goods to the US last year, mainly machinery, cars and pharmaceuticals.The UK exported almost £60bn worth of goods to the US last year, mainly machinery, cars and pharmaceuticals.
In addition to the 10% tariffs, a 25% tariff has been put on UK car exports, as well as steel and aluminium products.
The government's official forecaster estimates a worst-case scenario trade war could reduce UK economic growth by 1% and wipe out the £9.9bn of economic headroom Chancellor Rachel Reeves gave herself at last week's Spring Statement.The government's official forecaster estimates a worst-case scenario trade war could reduce UK economic growth by 1% and wipe out the £9.9bn of economic headroom Chancellor Rachel Reeves gave herself at last week's Spring Statement.
It could mean that in order to meet her own fiscal rules, she would have to raise taxes or make cuts to government spending.It could mean that in order to meet her own fiscal rules, she would have to raise taxes or make cuts to government spending.
Behind the scenes the government says it has been laying the groundwork for a trade deal with the US.
Insiders on the UK side say a deal is practically done. But no one knows if, or when, Trump will sign off on it.
Any deal would be broader than just lower tariffs the BBC understands, focusing on technology, but also covering elements of trade in goods and services as well as agriculture - a controversial area in previous unsuccessful US-UK trade talks.
Chancellor Rachel Reeves has suggested the UK could change its taxes on big tech firms as part of a deal to overturn US tariffs.
The digital services tax, introduced in 2020, imposes a 2% levy on tech firms, including big US firms such as Amazon, bringing in about £800m in tax per year.
Both the government and business groups have largely backed a strategy of not provoking the Trump White House.
But a big question remains whether President Trump's headline 10% universal tariff is even up for negotiation. Speaking to MPs Reynolds suggested it is, but White House officials have told the BBC the tariff is tied to a broader emergency measure that could take time to unwind.
For the first time the government has announced a loose deadline for the negotiations - the business consultation on a response must wrap up on 1 May.
If no deal is signed by then pressure will mount on Prime Minister Sir Keir Starmer to strike back with retaliatory tariffs.