The UK’s business and trade secretary has said he “won’t hesitate to respond” to Donald Trump’s tariffs on steel and aluminium, amid tough EU levies on US booze.
Jonathan Reynolds said the UK would retain a “pragmatic approach” to the escalating trade conflict that saw the US president roll out 25% tariffs on steel and aluminium imports from around the world.
The US is the third-largest market for UK steel exports, buying nearly £390m worth of British steel in 2023, according to International Steel Statistics Bureau data.
The trade secretary said it was “disappointing” to see levies imposed on British goods, adding the UK would “keep all options on the table and won’t hesitate to respond in the national interest”.
The European Union, meanwhile, hit back with a sterner retaliation, announcing a two-stage tariffs package starting from 1 April that will cover initially €8bn worth of US products such as bourbon and jeans.
And from mid-April, the bloc will roll out further levies on more than €18bn US exports, subject to approval by EU member states. The levies will also hit steel and aluminium goods such as pipes, tin foil and household products like cooking ware.
“We deeply regret this measure,” European Commission president Ursula von der Leyen said in a statement.
“Tariffs are taxes. They are bad for business, and even worse for consumers. These tariffs are disrupting supply chains.
“They bring uncertainty for the economy. Jobs are at stake. Prices will go up. In Europe and in the United States. The European Union must act to protect consumers and business.”
Trade group SpiritsEurope said in a statement it was ”extremely concerned by the EU announcement this morning regarding EU rebalancing tariffs on US whiskey and other US spirits categories in response to US tariffs on steel and aluminium” and urged ”the EU and the US to keep spirits out of unrelated disputes”.
Marco Forgione, director general of the Chartered Institute for Exports & International Trade, said Trump was “determined to unpick the traditional multilateral administrative system in pursuit of his America First policy”.
“We’ve seen two contrasting approaches play out in the last 24 hours: the EU immediately firing back, which will harm business and consumers, and a measured statement by the UK government which is more pragmatic and opens the door to a positive negotiation with a view to securing a trade deal with the US.”
But Liberal Democrat deputy leader Daisy Cooper said this morning Reynolds needed to “toughen up” against Trump.
While it is yet unclear how the UK will respond to Trump’s moves, William Bain, British Chambers of Commerce head of trade policy, said any tariffs on UK goods meant “prices and costs will inevitably go up and this is a lose-lose scenario for consumers, businesses, and economic growth”.
“This is a difficult day for trans-Atlantic trade and plunges businesses, in both the US and UK, into a new age of uncertainty.
“Products made with UK steel and aluminium play an important part in many supply chains in the US.
“Both sides will now be facing up to negotiations on how the burden of these new tariffs will affect businesses in both countries,” Bain added, noting “a series of tit-for-tat tariffs could easily spiral into an all-out trade war and would do the UK little benefit”.
“UK firms will want to keep trading with their customers and clients in the US and vice versa. Our commercial, investment and trading relationships remain strong.”
BCC research showed that 63% of the UK’s manufacturing exporters were concerned about the impact of tariffs even before their introduction.
“Today’s setback does not mean we have reached the end of the road in terms of negotiations”, Bain said. “Tariffs can be lifted at any time.
“Businesses will be looking to the UK government to continue dialogue with the US to resolve this situation and restore certainty for firms, which has been badly lacking over recent weeks.
“We must keep talks alive and retaliatory tariffs should only be used as a means of last resort. If talks succeed, it would be a win-win, bringing welcome stability and pro-growth economic conditions for both sides.”
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