Donald Trump and Sir Keir Starmer (Image: GETTY)
Britain is set to be hit by Donald Trump's tariffs, Downing Street has admitted. Sir Keir Starmer's government had been trying to negotiate an exemption from the taxes on imports into the US which come into force later this week.
The US President has announced a 25% import tax will be introduced on all cars imported to the US, a measure expected to hit British luxury car makers such as Rolls-Royce and Aston Martin. The levy is on top of a series of tariffs set to come into effect on April 2, which could include a general 20% tax on UK products in response to the rate of VAT.
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Sir Keir Starmer's official spokesman said today: "When it comes to tariffs the Prime Minister has been clear he will always act in the national interest and we've been actively preparing for all eventualities ahead of the expected announcements from President Trump this week, which we would expect the UK to be impacted by alongside other countries.
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"Our trade teams are continuing to have constructive discussions to agree a UK-US economic prosperity deal.
"But we will only do a deal which reflects this Government's mandate to deliver economic stability for the British people, and we will only act in the national interest."
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Asked whether the Government had given up hope of an economic deal between the UK and the US being signed before Wednesday, the spokesman said he is "not going to put a time frame on those discussions" but that they are "likely to continue beyond Wednesday".
He said that the UK will "take a calm and pragmatic approach in our response".
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Sir Keir and Mr Trump discussed the "productive negotiations" the two nations have had towards an economic pact in a phone call on Sunday.
According to a Downing Street read out of the call, the two leaders agreed that "talks will continue at pace this week".
Mr Trump has branded April 2 "Liberation Day" for the US, as he claimed the tariffs he plans to introduce will free the US from foreign goods and boost its domestic economy.
But the new taxes are a blow to Labour's bid to grow the economy after Chancellor Rachel Reeves made a series of cuts at the spring statement in an attempt to balance the books.
Asked whether the Government would be considering another budget in the event of being hit by tariffs, the spokesman said: The UK will "reserve the right" to respond to tariffs "in a way that does protect British industry".
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Shadow trade secretary Andrew Griffith said: “This news is potentially a hammer blow not just to British businesses and workers but to his own Chancellor whose creative accounting at the emergency budget fails to include the impact of tariffs.
"Labour claims talks with the US are going “well”. But, if this is what well looks like, I wouldn’t like to see what the opposite looks like. The Prime Minister has so far failed to come up with the goods, he needs to rekindle our US trade deal.
"This is just further proof that, when Labour negotiates, Britain loses."