Downing Street has announced that Sir Keir Starmer and Donald Trump have engaged in “productive negotiations” regarding an economic deal between the UK and US, stating that discussions will continue without delay. The phone call on Sunday night between the two leaders comes in light of a looming deadline on US tariffs, with sources at No 10 indicating that the UK is prepared to retaliate against US trade taxes if necessary. British negotiators are striving to secure a last-minute exemption prior to the imposition of Trump’s 25% levy on car imports, slated for Wednesday.
The prime minister has previously expressed his reluctance to engage in a trade war with the US, while Sir Keir has maintained that the UK “reserves the right” to implement reciprocal tariffs on the US if a solution to exempt the UK is not achieved. With the UK emphasizing its relatively balanced trading relationship with the US compared to other partners, the independent Office for Budget Responsibility has cautioned that a reciprocal trade war could result in substantial economic setbacks, severely limiting Chancellor Rachel Reeves’ flexibility within her self-imposed fiscal regulations.
In the event that tariffs are imposed, it remains uncertain how the UK would respond. Various options are under consideration, ranging from imposing duties on sectors where British products hold significant importance to targeting specific products like Harley Davidson motorcycles. UK car exports amount to approximately £7.6 billion annually, with the US ranking as the second largest market for UK cars following the European Union, according to the Society of Motor Manufacturers and Traders (SMMT). Trump’s proposed tariffs are expected to impact British luxury car manufacturers such as Rolls-Royce and Aston Martin.
During their discussions, the prime minister and president also addressed the ongoing pressure on Russia concerning the conflict in Ukraine. No 10 revealed that Trump extended his best wishes to King Charles III, who had recently experienced temporary side effects during cancer treatment. The leaders concurred to stay connected in the upcoming days, continuing their dialogue on various issues of mutual interest and shared concerns
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