Donald Trump’s worldwide tariffs “will have an economic impact”, Keir Starmer told business chiefs in Downing Street on Thursday morning – but he assured government would respond with “cool and calm heads”.
Trump unleashed new tariffs on all US imports on 2 April, his so-called ‘Liberation Day’, including a 10% tariff on the UK, as well as most countries including Australia, Argentina and Saudi Arabia.
These will begin on 5 April, with further tariffs for about 60 other countries the US deems as the “worst offenders” – including 20% for the EU, 54% for China and 24% for Japan goods – set to come into effect on 9 April.
Starmer reiterated his intentions to pursue a US trade deal that would spare the UK from the fees.
He added: “Clearly, there will be an economic impact from the decisions the US has taken, both here and globally.
“But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head.”
The food industry is still reeling from the announcement, which will affect more than £60bn-worth of British exports to the US, including scotch whisky – the food and drink industry’s biggest export to the US, worth around £1bn in annual market value – and other popular goods such as salmon, cheese and chocolate.
A spokesperson for the Scotch Whisky Association said the sector was “disappointed that scotch whisky could be impacted by these tariffs”.
“We welcome the intensive efforts by the UK government to reach a deal with the US administration, and we continue to support this measured and pragmatic approach towards a mutually beneficial resolution.”
Meanwhile, Salmon Scotland echoed the SWA’s comments, but added it was “confident” US consumers would continue to purchase imported Scottish salmon.
The Food and Drink Federation also said in a statement it was ”concerned” to see an additional 10% tariff imposed on goods to the US.
“Whether chocolate or the iconic tea and biscuits, our members are predominantly exporting heritage British food and drink products that are well loved by American consumers.
“The majority of these are made by the 12,000 small and medium sized businesses in our sector, who will be disproportionately affected by these tariffs.”
Tina McKenzie, policy chair of the Federation of Small Businesses, agreed the news were ”a major blow to SMEs”.
Meanwhile, business and trade secretary Jonathan Reynolds has said he is launching a consultation with businesses on how implementing retaliatory tariff measures against the US would impact them. The consultation is open until 1 May.
Read more: Trump’s Liberation Day: what could US import tariffs mean for NI food and drink?
The farming sector is also bracing for impact – the Agriculture & Horticulture Development Board’s senior economist, Jess Corsair, has warned of the effects levies could have on UK meat & dairy, as Britain is the second main exporter of cheese to the US, topped only by the EU.
The UK is also a big exporter of pork and beef to the US.
“This will be a major disruptor of global trade, but the impacts will be difficult to predict until we know how the various trading partners will react,” Corsair said.
“It is likely that there will be changes to trade flows and we will examine the impact how trade will be displaced, especially with key agricultural exporters such as Canada, Mexico, Australia and New Zealand.”
The NFU also warned the import tax hikes were going to be a “challenge” for the industry, which counted the US as the second-biggest market for agrifood goods after the EU.
NFU president Tom Bradshaw urged the government to “stand up for UK farming” in any deal with the US.
The EU and China have already come out with stronger stances after European and Asian markets fell sharply due when trading opened on Thursday morning due the US president’s statement.
EU Commissioner Ursula von der Leyen said Trump’s decision was a “major blow to the world economy”. The bloc has already said it will respond “robustly”, targeting popular US goods like bourbon, orange juice and denim.
Walter Zanre, MD for Britain’s biggest olive oil brand, Filippo Berio, said the US was “a very important market for our parent company in Italy”, and that while having the same tariff rates applied to all olive oil exporting countries levelled the playing field, it was still “an effective 20% increase on raw material costs” for a sector that has struggled hugely with cost increases in recent years.
China too has condemned the move and warned it would take “resolute countermeasures” against the US.
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