The US imposed global tariffs on Wednesday, with the UK facing a baseline 10% rate.
Prime Minister Kiel emphasized that Britain will be led by national interests and announced that Britain has pledged to secure an economic agreement with the United States to avoid a potential trade war.
In response to the global tariff hike announced by President Donald Trump on Wednesday, Priorities acknowledged that the UK’s 10% tariff rate would “clearly” impact, but the government insisted that the development was “fully prepared.”
He called for a “cool and calm” approach, highlighting the UK’s maintaining a “fair and balanced” trade ties with the US.
The US is the UK’s top trading partner, accounting for 17.2% of total UK trade. The relationship is broadly balanced with surplus trade compared to countries like China, where the US operates a trade deficit of $295.4 billion.
As a result, China and other countries are considered “worst criminals,” including Vietnam, Cambodia and the European Union, and face much higher mutual tariffs than the UK.
Starting April 9th, these taxes will be set at 54% in China, 46% in Vietnam, 49% in Cambodia, 36% in Thailand and 20% in EU.
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“Negotiations on economic prosperity transactions that strengthen existing trade relations. They continue and we will fight for the UK’s best deal,” said Presi.
Reactions from political leaders
The government may view the decline in UK tariff rates as a diplomatic success, but opposition parties have criticised labour for preventing taxation and slowing engagement in trade negotiations.
Lib Dem leader Ed Davey urged the minister to form a “rejoiced coalition” with federal and European partners to oppose Trump’s tariffs, including retaliation measures and new trade agreements.
Meanwhile, reform UK leader Nigel Phage has admitted that 10% tariffs from the US are “bad news,” but are favorable to the 20% rate that EU countries face.
Speaking to Parliament on Wednesday, Executive Director Jonathan Reynolds highlighted the government’s plan to ensure transactions that protect the UK’s domestic industry from the effects of US tariffs in a “measured and proportional” way.
“We have a clear destination that provides workers with that financial security, and we are moving forward with a transaction that allows us to do that,” he said.
Secretary of State for Business and Trade Trade outside London’s 10th Downing Street on July 9, 2024. Chris J. Ratcliffe/Reuter
Trade distortions in Northern Ireland
Unlike the EU, which announced measures on various American products last month, the UK has so far chosen to withhold retaliatory actions.
On Wednesday, the government confirmed it would seek input from businesses over the next four weeks on products that could be included in the UK’s tariff response.
Reynolds said the talks running until May 1 are the necessary steps for the UK to “keep all options on the table” to continue trade talks with Washington.
The UK’s position is further complicated by the unique Northern Ireland deal arrangements. This is partially consistent with EU customs regulations based on the terms of the post-Brexit transaction.
If the EU proceeds with retaliatory tariffs and the UK does not, it could create a two-tier pricing system for American goods where imports into Northern Ireland will be taxed under EU measures, but imports into other parts of the UK will be taxed.
He urged Westminster to protect Northern Ireland’s interests and ensure that its location in the UK domestic market was “fully protected.”
In Brussels, the European Commission has not yet officially announced a new wave of tariffs, but has said it is preparing measures if negotiations with Washington fail.
“I agree with President Trump. Others have unfair advantages to current rules and are ready to support efforts to adapt the global trading system to the reality of the global economy,” she said.
King Charles III (L) and President Sheen Steel Husun Lee stand in the Monopile Foundation section when they visited the Shih Factory in Middlesbrough, England on February 13, 2025. Oli Scarff – WPA Pool/Getty Image
UK businesses respond
UK businesses and industrial groups have expressed deep concern following the White House announcement.
UK Steel, which saw a 25% tariff on British Steel introduced last month, warned of continued damage to the sector.
Group Director Gareth Stace called for “bold, decisive and important intervention” from the government, urging the minister to strengthen the UK’s domestic trade defenses.
Manufacturing group Make UK said tariffs risk dismantling longtime transatlantic supply chains and damaging both the UK and US economies.
“This is not a time for a trade war,” said Stephen Phipson, CEO of the UK, calling for a customs task force to support businesses through uncertainty.
The UK auto industry has warned that manufacturers cannot absorb the costs of new tariffs. The Auto Manufacturers and Traders Association said American consumers are likely to be at higher prices for the iconic British brands, while British producers could be forced to force production amid weakening demand.
The UK Chamber of Commerce (BCC) urged the government to maintain its negotiation course, but warned that the economic impact would be far-reaching.
“Orders are falling, prices are rising, and global economic demand is weaker as a result. This is a situation that has been lost to everyone,” said BCC Director Shevaun Havilland.
The BCC advised companies to start direct meetings with US customers to manage the impact of tariffs and investigate alternative export markets such as the EU and CPTPP countries.
