Trump’s Tariffs Will Hit UK Economy, Starmer Warns Business Leaders
Prime Minister Keir Starmer has warned that Donald Trump’s newly announced tariffs will “clearly” impact the UK economy and global markets, as Downing Street scrambles to secure a trade deal with the US before the levies take full effect.
Speaking to business leaders including Shell, Bentley Motors, and Barclays at a Downing Street meeting, Starmer acknowledged the serious threat posed by the tariffs, which include a 10% charge on all UK imports and a 25% tariff on cars.
“We are prepared,” Starmer said, calling the situation part of a “new era” in global trade and economy. “One of our great national strengths is our ability to keep a cool head in moments of uncertainty.”
Trade Talks Ongoing
The UK government has been in behind-the-scenes talks with US officials for weeks. Business Secretary Jonathan Reynolds confirmed the two sides had reached the framework of a deal, pending sign-off from President Trump.
Inside Whitehall, officials hope the 10% tariff represents a ceiling rather than a fixed rate, and believe negotiations could still lower or offset the economic pain.
Chancellor Rachel Reeves has even floated amending the UK’s digital services tax—a levy affecting tech giants like Amazon and Google—as part of a broader compromise.
Business and Political Reaction
A Downing Street source noted that even a 10% tariff, compared to the 20% imposed on the EU, could save thousands of UK jobs. However, the car industry has voiced concern over the additional 25% tax on UK-made vehicles, with the Society of Motor Manufacturers and Traders (SMMT) calling it “deeply disappointing.”
Meanwhile, Conservative leaders criticized Labour’s framing of the issue. Shadow Home Secretary Chris Philp accused the government of failing to act early enough, while Shadow Trade Secretary Andrew Griffiths claimed Brexit had shielded the UK from harsher penalties.
Northern Ireland’s Economy Minister Caoimhe Archibald expressed concern that post-Brexit arrangements could complicate trade further, potentially exposing Northern Ireland to EU-aligned retaliatory tariffs.
Liberal Democrats and Reform UK Weigh In
Liberal Democrat leader Sir Ed Davey proposed forming an “economic coalition of the willing” to retaliate against what he called “appalling bullying tariffs.” He also singled out Elon Musk, suggesting a retaliatory tariff on Tesla cars.
Reform UK chairman Zia Yusuf warned the UK is heading toward a fiscal crunch, saying the country risks absorbing high inflation “with no offsets,” unlike the US, which is also cutting taxes and spending.
Trade War Threatens Growth
The UK exported nearly £60 billion in goods to the US last year—making the US Britain’s largest single export market. Economists estimate that a full-blown trade war could cut UK GDP growth by as much as 1%, potentially wiping out the £9.9 billion fiscal headroom Chancellor Reeves outlined just last week.
Despite the pressure, government sources say talks are progressing, with hopes for a deal that includes not just reduced tariffs, but broader cooperation in technology, services, and agriculture.
As global markets react and UK industries brace for impact, the government remains cautiously optimistic—but the stakes could hardly be higher.
