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Britain is racing to keep away from the worst of US President Donald Trump’s world tariffs, due on April 2, after “productive” talks on Tuesday that included discussions concerning the UK’s digital providers tax.
UK enterprise secretary Jonathan Reynolds has advised his officers to hold on speaking with Trump’s commerce crew over the following 48 hours within the hope of securing a deal that might spare the UK the very best stage of US reciprocal tariffs.
The discussions embody the UK’s levy on companies corresponding to Alphabet and Fb, a key grievance of US negotiators, in line with British officers, regardless of the UK Treasury insisting it has no plans to drop the £800mn a 12 months tax.
Allies of UK chancellor Rachel Reeves admit {that a} world commerce conflict may “blow all our plans off beam”.
Trump has vowed to impose “reciprocal” tariffs on the US’s buying and selling companions on April 2. However he’s focusing on not solely international locations that impose tariffs on the US but additionally people who use different insurance policies the US president dislikes, corresponding to inside gross sales taxes.
British officers briefed on the talks mentioned they accepted that the UK would inevitably be hit with Trump’s promised tariffs subsequent month however that Reynolds’ intention was to see them utilized at a decreased charge.
“We’re working at speedy velocity,” mentioned one UK official. “There can be some mates of the US who can be within the tent and others who can be exterior. Our intention is to be within the tent.”
British officers mentioned there have been “potential heads of settlement” on a broad commerce deal between the UK and US, targeted on expertise, which may alleviate punitive tariffs on Britain, however they conceded the American negotiation place was “demanding”.
A key US demand is that Britain drops its digital providers tax, a levy launched in 2020 which falls closely on American tech corporations, however which is forecast to lift £800mn for a cash-strapped Treasury in 2024-25. Different international locations in Europe have comparable taxes, as has Canada.
Reynolds mentioned the calls for throughout a two-hour assembly in Washington on Tuesday with US commerce secretary Howard Lutnick, US commerce consultant Jamieson Greer and US particular envoy Mark Burnett.
Officers known as Reynolds’ talks “productive” and targeted on the truth that Britain and the US have a broadly balanced commerce relationship.
The UK Treasury mentioned it was not planning to vary the digital providers tax, a 2 per cent levy on the revenues of engines like google, social media platforms and on-line marketplaces which derive worth from UK customers. However British officers mentioned it was below dialogue.
US Treasury secretary Scott Bessent advised Fox Enterprise Community this week that the Trump administration would apply completely different tariffs to completely different buying and selling companions. “On April 2, every nation will obtain a quantity that we imagine represents their tariffs,” Bessent mentioned. “For some international locations it could possibly be fairly low, for some international locations it could possibly be fairly excessive.”
Trump is very focusing on the EU and any particular deal for the UK may result in commerce tensions between London and Brussels.
Lord Peter Mandelson, a robust pro-European, has mentioned that Brexit does supply Britain an opportunity to have a greater relationship with the US than its European neighbours.
UK Prime Minister Sir Keir Starmer and Trump agreed final month that their groups ought to begin working collectively on “an financial prosperity deal”.
The UK Division of Enterprise and Commerce mentioned: “The UK seems to be ahead to growing this deal over the approaching weeks and months.”
