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Britain is drawing up contingency plans for potential retaliation if Donald Trump decides to focus on its exports with tariffs, even because the US president advised he may spare the UK.
Trump advised reporters: “The UK is manner out of line, and we’ll see. However the European Union is actually out of line.”
He added: “UK is out of line however I’m positive that one, I feel that one may be labored out. However the European Union, it’s an atrocity what they’ve achieved.”
Sir Keir Starmer’s authorities has achieved state of affairs planning for potential retaliation within the occasion of Trump focusing on UK exports, in response to officers briefed on the contingency plans.
“We’re ready,” mentioned one UK official. “We’re wanting ahead to working intently with President Trump however ministers will at all times do what’s greatest within the nationwide curiosity.”
The feedback got here whilst the chance of a direct international commerce conflict started to recede on Monday afternoon when Mexico’s President Claudia Sheinbaum mentioned she and Trump had agreed to postpone US tariffs for a month. The White Home had additionally focused Canada and China with heavy tariffs.
“The path taken by the US this weekend has confounded most analysts,” mentioned one other British official. “Being an open economic system is Britain’s large promoting level however there’s a very excessive diploma of uncertainty. You possibly can’t rule something out.”
Talking at Nato headquarters in Brussels on Monday, Starmer mentioned of the prospect of US tariffs on Britain: “It’s early days. It’s actually vital now we have a powerful buying and selling relationship.”
Downing Avenue on Monday left open the opportunity of tit-for-tat retaliation if Trump targets Britain however refused to debate “hypothetical conditions”.
“We need to construct on the present UK-US commerce relationship,” a Downing Avenue spokesperson mentioned. “The prime minister has constructed a really constructive relationship with President Trump.”
For his half Trump mentioned: “Prime Minister Starmer has been very good. We’ve had a few conferences, we’ve had quite a few telephone calls, we’re getting alongside very nicely.”
Downing Avenue mentioned Britain and the US had “a good and balanced buying and selling relationship which advantages either side of the Atlantic”, however ministers worry this might not be sufficient to guard the UK from tariffs.
The UK Treasury needs to maintain any retaliation to a minimal and Jonathan Reynolds, enterprise secretary, told the Financial Times final yr: “Growing prices of products or meals to your constituents shouldn’t be engaging.”
Sam Lowe, commerce specialist at Flint World, mentioned the issue with retaliation was that “it’s truly fairly exhausting to inflict financial ache on the US and it might inevitably be seen as fairly provocative”.
Nonetheless, he mentioned the UK had “a protracted checklist of tariffs on the shelf” from a earlier commerce dispute with the US — over aluminium and metal — that it might mud down if ministers determined to retaliate.
They included tariffs aimed toward particular industries in “crimson states” that kind Trump’s political heartland: earlier targets have included Levi’s denims and Harley-Davidson bikes.
Lowe believes ministers usually tend to attempt to avert US tariffs within the first place and says they’ve studied the best way Japan handled Trump in his first time period: “Principally hold your head down and don’t provoke him.”
He mentioned the UK might supply to purchase extra US merchandise — comparable to gasoline or defence gear — or take a harder stance with China, a coverage Starmer is anxious to keep away from. “The opposite factor is simply to be very nice to Trump,” Lowe added. “Roll out the King.”
Duncan Edwards, chief govt of the BritishAmerican Enterprise commerce physique, mentioned: “My view is that the UK mustn’t retaliate however politically it could be nearly unattainable to not.”
David Henig, a former authorities commerce official, mentioned one conventional EU goal in any transatlantic commerce dispute was Bourbon whiskey, however Scotch whisky producers would need to keep away from reprisals that affected a key export market.
Sir Ed Davey, Liberal Democrat chief, mentioned Starmer ought to convene a summit of Commonwealth leaders to point out support for Canada, which together with Mexico has borne the brunt of Trump’s tariffs.
Starmer on Monday was in Brussels for talks with EU leaders, conscious that his try to “reset” post-Brexit relations with the bloc dangers antagonising Trump.
The prime minister needs improved trade relations with the EU and can also be looking for to deepen commerce co-operation with the US, notably within the area of companies and know-how.
In response to US figures, America ran an general commerce surplus with the UK in 2023, amounting to $14.5bn. That places Britain in a beneficial place as Trump threatens nations with important deficits.
