Rachel Reeves have warned Brits to brace for ‘difficult’ times as the UK now looks to be among the countries worst hit by Donald Trump‘s tariffs.
Downing Street signalled relief when the US president’s ‘Liberation Day’ assault was originally mounted.
The UK was only targeted with the ‘baseline’ 10 per cent – as well as the worldwide 25 per cent charge on imports of cars, steel and aluminium.
However, last week the US president postponed much tougher ‘reciprocal’ levies on the EU and a swathe of other trading partners as markets went into freefall.
He made another extraordinary climbdown yesterday by declaring that smartphones, computers and other electronic devices will be exempted from tariffs – including the 125 per cent he had charged on China imports.
That had sparked warnings that the prices of iPhones could triple in the US.
Britain now looks to be among the countries worst hit by Donald Trump’s (pictured) tariffs after his latest climbdowns
It has left the UK’s position looking relatively less attractive than other countries, even though the trade relationship was largely in balance before Mr Trump’s attack.
Cars are among Britain’s main goods exports to America, while the ailing steel industry also relies on the route.
Meanwhile, hopes have been fading that Keir Starmer can strike a wider Transatlantic trade deal to get rid of all tariffs.
The PM had hinted at concessions on a digital services tax, but Trump advisers have suggested there is little chance of a complete exemption from levies.
The ‘baseline’ reciprocal tariff of 10 per cent never applied to Canada and Mexico.
Chancellor Rachel Reeves has warned that the tariffs will have a ‘profound’ impact, saying she is ‘under no illusion about the difficulties that lie ahead’.
But in an article for the Observer she said the UK will argue for a ‘more balanced global economic and trading system’ that ‘recognises the benefits of free trade’, in an effective rejection of Mr Trump’s protectionism.
Ms Reeves stressed she wants ‘an ambitious new relationship with the EU’ as well as closer links with countries such as India.
‘The Labour party is an internationalist party. We understand the benefits of free and fair trade and collaboration. Now is not the time to turn our backs on the world,’ she wrote.
Overnight Mr Trump tried to put a brave face on the situation as he said he would give more details of the latest exemptions this week.
‘We’ll be very specific,’ he told reporters on Air Force One. ‘But we’re taking in a lot of money. As a country we’re taking in a lot of money.’
Some trade analysts suggested the move was a ‘game-changer’ that would bail out investors in tech firms such as Apple, Microsoft and Nvidia.
The White House said: ‘President Trump has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops.
‘At the direction of the president, these companies are hustling to onshore their manufacturing in the United States as soon as possible.’
Hopes have been fading that Keir Starmer (pictured) can strike a wider Transatlantic trade deal to get rid of all tariffs
