Britain is bracing for a major economic hit after President Donald Trump refused to exempt the UK from a wave of new global trade tariffs, with Downing Street now expecting duties of up to 20 per cent to take effect on Wednesday — what Trump has branded “Liberation Day”.
Despite weeks of behind-the-scenes negotiations, the US has refused to sign a proposed UK economic deal that ministers hoped would secure a carve-out from the sweeping measures. Officials said the deal, which includes concessions on artificial intelligence, tax and agriculture, remains “on the table”, but Trump has opted for a blanket tariff announcement without exemptions to maximise political impact.
The Office for Budget Responsibility warned last week that the imposition of tariffs could deliver a 0.6 per cent blow to GDP, equivalent to £18 billion, and completely erase the £9.9 billion fiscal headroom that Chancellor Rachel Reeves had carved out in her spring statement — potentially forcing further tax rises or public spending cuts.
While Prime Minister Keir Starmer has been careful to cultivate ties with Trump and has so far refrained from public criticism, pressure is mounting for a firmer response. Downing Street insists Starmer will “act in the national interest”, but may delay retaliation in the hope of reaching a longer-term UK-US trade deal.
Ministers are increasingly concerned about a potential surge in cheap foreign imports, originally destined for the US, flooding UK markets. Plans are being drawn up to protect key sectors — including automotive, ceramics, and heavy machinery — by imposing import quotas or emergency tariffs to prevent market disruption.
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