The UK is in touch with the US administration every day as ministers and officials scramble to avoid more economic chaos triggered by President Trump’s tariff blitz.
The UK will need to offer the US ‘something extraordinary’ (Image: Getty)
Keir Starmer will have to offer “extraordinary” concessions to secure tariff-free trade, the White House has warned.
The UK is in touch with the US administration every day as ministers and officials scramble to avoid more economic chaos triggered by President Trump’s tariff blitz.
Most countries now face the same 10% rate as the UK on importing goods to America after the US president temporarily halted the sweeping “retaliatory” tariffs which had sent global markets into turmoil.
But Kevin Hassett, a senior economic adviser to Mr Trump, said any deal that would persuade the president to go below that would need to be “extraordinary”.
Keir Starmer is hoping to secure a trade deal with the US (Image: Getty)
The tariffs have sparked alarm in the financial markets (Image: Getty)
“I think everybody expects that the 10% baseline tariff is going to be the baseline,” he told CNBC. “It is going to take some kind of extraordinary deal for the president to go below there.”
He said the White House was in negotiations with around 20 countries and that two deals were almost closed. The Prime Minister earlier said his team were in contact with Mr Trump’s team every day.
He rejected the suggestion that the US president is not taking his calls, saying: “No not at all. You have to understand that for the UK and the US we’re actually talking all the time.”
Sir Keir also denied the British approach to not retaliate to the US tariffs had resulted in no advantage for the UK as most nations now face the same tariff rate.
“I don’t think having a strong relationship with the US has given us no advantage whatsoever,” he said.
He said the UK is continuing to talk to the US about how to mitigate the impact of the tariffs, but that no business sector is calling for him to “jump in with both feet to retaliate and cause a trade war”.
Sarah Breeden, a deputy governor of the Bank of England, told The Guardian that UK growth would be hit by “the most significant change in trade policy in a century”.
The president’s surprise announcement of the 90-day pause to hefty tariffs imposed on some countries brought respite to battered stock markets across the globe, including London’s FTSE 100.
While the Government is seeking a trade agreement with the US to alleviate the impact of tariffs, they are also seeking to strengthen trade relations with other countries to protect the economy from further potential shocks.
Chancellor Rachel Reeves has said she will seek to negotiate with the US when she visits Washington at the end of April for the IMF spring meeting of global finance ministers, and that a UK-EU summit on May 19 would be a chance to refresh the UK’s relationship with the bloc.
Mr Trump said on Wednesday that he would pause higher tariffs on trading partners such as Japan and the EU, telling reporters that “people were getting yippy” in an apparent acknowledgement of the market turmoil in recent days.
However, he said he would be raising his tax rate on Chinese imports to 125% amid an escalating trade war with Beijing, which has promised to “fight to the end” over the levies imposed by the White House.
Trending
Imports of cars, steel and aluminium to America are all still subject to a 25% tariff. In the early hours of Friday morning, Japan’s Nikkei share index sank by 5.4% as stock prices resumed plunging.
Sir Keir has said a trade deal with Washington would not be enough to deal with the fallout from the tariff war, adding: “I am very clear in my own mind that that will not alleviate the challenge. It’s bigger than that – that’s why we’ve got to step up and turbocharge our economy.”
Ministers fear Mr Trump could hit the UK with a 25 per cent levy on the pharmaceutical industry. Officials are continuing to lobby US counterparts over the issue. The life sciences sector is central to the Government’s growth strategy.
The UK exports £8.8billion worth of pharmaceuticals to the US each year and is home to a number of American pharmaceutical factories.
Most Popular Comments