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 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.”
Badenoch admits she has not spoken to Vance over tariffs
Our political correspondent Archie Mitchell reports:
Kemi Badenoch has admitted she has not picked up the phone to JD Vance to urge the US not to hit Britain with damaging tariffs, despite having a friendly dinner with the vice president last year.
The Tory leader said she did not want to “cut across” the UK government’s trade talks on the matter. But, with the threat of Donald Trump’s import taxes looming, questions were raised about whether Ms Badenoch should have urged her influential friend to argue Britain’s case.
Ms Badenoch said: “I’m not cutting across what the government is doing. When I was in government, finding out the people in the opposition were trying to undermine the work that was happening was not the way to go about doing it.
“What we do is we speak publicly about what we want to see happen, and help the government course correct.”
How will the UK be affected by Trump’s tariffs?
Donald Trump is yet to reveal the full extent of his so-called “Liberation Day” tariffs, but his team have given a clear indication what to expect.
The measures will add to the 25 per cent tariff placed on imports of steel and aluminium to the US on all countries since March.
New global tariffs targeting auto parts used to make cars have now been confirmed after Trump delayed imposing 25 per cent on these goods from its neighbouring nations and China until the start of April.
Hundreds of reciprocal tariffs are also understood to have been drawn up by the Trump administration, which will be different for every country. These will consider factors like existing tariffs, trade balances and VAT for all of the US’s trading partners.
My colleague Albert Toth has more details here:
Lammy says UK must ‘prepare for the worst’ over Trump tariffs
David Lammy has warned that the UK must “prepare for the worst” over tariffs from the US as “intense conversations” continue on a possible economic agreement.
Pressed in the Commons by Lib Dem MP Calum Miller that the “best step” ministers could take to support UK businesses would be “to start talks on a bespoke UK-EU customs union without delay”, the foreign secretary replied: “We are an open-trading nation. We have been that under successive governments.
“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, as the prime minister indicated again just yesterday.
“But it’s also right that the business secretary and I and others across government continue to engage with business and industry so we can give them the best support at what will be a turbulent economic time, not just for our own country but of course much of the world.”