The recent imposition of new tariffs by Donald Trump has prompted the Prime Minister to consider using industrial policy to protect British businesses. Sir Keir Starmer, writing in the Sunday Telegraph, expressed the need to seek an economic deal with the US while also being open to state intervention to safeguard the national interest. He emphasized the importance of adapting to the rapidly changing global market landscape, even if it means departing from traditional sentiments.
With the UK facing a 10% import duty rate and additional tariffs of 25% on exports such as cars, steel, and aluminum, the government is taking steps to bolster alliances and reduce trade barriers. Starmer outlined plans to enhance domestic competitiveness to minimize the impact of global shocks on British businesses. While not ruling out potential tax increases in the future, he highlighted the government’s current focus on protecting businesses from the looming storm of tariffs with industrial policy.
In discussions with world leaders over the weekend, including French President Emmanuel Macron, the Prime Minister emphasized the detrimental effects of a trade war and the necessity of considering all options in response. The UK recently published a list of US goods that could be targeted in potential retaliatory tariff measures, covering imports that would have a limited impact on the economy. As British businesses navigate the impact of tariffs, Jaguar Land Rover announced a temporary halt in shipments to the US to adjust to the new trading terms.
Conservative leader Kemi Badenoch has called for a comprehensive trade deal with the US that fosters growth while maintaining high standards. In contrast, Liberal Democrat leader Sir Ed Davey proposed exploring alternative trade partnerships to demonstrate to President Trump that the UK is not solely reliant on trading with the US. Ultimately, the government remains committed to protecting British businesses amidst the uncertainty caused by new tariffs
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