Sir Keir Starmer will be holding a series of talks with global leaders this weekend as the world reels from US President Donald Trump’s tariffs and European markets plummeted following retaliatory measures from China.
Downing Street made clear on Friday that the UK is “disappointed” with the US levies and will be speaking with partners in the coming days as it grapples with a “new era” in trade and a “shifting” economic landscape.
Number 10 contradicted the US president’s claim on Thursday that the Prime Minister was “very happy” about the imposition of a 10% import tax on British goods entering America.
Asked on Friday whether that characterisation was accurate, a Downing Street spokesman said: “We’re disappointed by the tariffs that have been brought in.
“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally, but both the Prime Minister and the Business Secretary have been very clear over the last 24 hours that we will continue to act in the best interests of the UK, and we’re prepared to do so.”
The official added: “We’ll be engaging with international leaders over the weekend… The need for engagement with international leaders is clear. It is a changing, shifting global economic landscape.”
It is unclear at this point which countries will be included in the calls but Number 10 said there would be updates in the coming days.
Ministers have so far avoided criticism of the US president as they seek to secure an economic deal with Washington that they hope would mitigate the damage posed to Britain by Mr Trump’s global import taxes.
But on Friday morning, Foreign Secretary David Lammy said he regretted the “return to protectionism” in the US and warned that Britons were “very concerned” about how tariffs would hit their personal finances.
He said all options remain on the table to respond in the national interest, but that the UK’s immediate focus was on negotiating an economic agreement with Washington.
Asked whether Mr Lammy had been speaking for the UK, a Number 10 official said: “You have the Foreign Secretary’s words, and you have the Prime Minister’s words from yesterday.”
Pressed on whether Sir Keir himself would characterise this period as a “new era of protectionism”, the spokesman said: “No.
“I wouldn’t characterise it in any particular way apart from the fact that the global economic landscape is shifting, and we need to shift with it.”
Speaking to reporters on board Air Force One on Thursday, Mr Trump had said of Sir Keir: “We have a very good dialogue. I think he was very happy about how we treated them with tariffs.”
The US president’s announcement on Wednesday sent stock markets tumbling across the globe, with the Prime Minister warning it marks the beginning of a “new era” in world trade.
British goods will be subject to a 10% import tax, which is the lowest “baseline” category, but Sir Keir has acknowledged UK exporters will still be hurt by the levy.
While the blanket tariff will come into effect on Saturday, the car industry has already been hit with a 25% import tax which began in the early hours of Thursday morning.
(PA Graphics)
The UK’s top stock market index plummeted on Friday after China announced it will impose a 34% reciprocal tariff on imports of all US products.
The FTSE 100 dropped by about 4% shortly after the announcement, losing around 150 points in the space of an hour and hitting the lowest level since December.
European indexes were also suffering steep falls, with Germany’s Dax tumbling around 4.5% and the Cac 40 down 4% just before midday.
Ministers still hope for a deal with the US to secure some exemption from the tariffs, with Sir Keir promising businesses on Thursday that he would “fight for the best deal for Britain”.
But the Government has drawn up a list of products that could be slapped with import taxes in retaliation and will consult with businesses on how they will be hit by any UK measures striking back at Mr Trump’s global trade policy.
An “indicative list” published on Thursday showed goods that could be targeted, including bourbon whiskey, motorcycles, guitars and jeans.
But an immediate response is unlikely as Trade Secretary Jonathan Reynolds told MPs he would hold a four-week consultation on countermeasures.
The Business Secretary has told MPs he would hold a consultation on countermeasures (Stefan Rousseau/PA)
Speaking to broadcasters on Friday, Treasury minister James Murray said “important” online safety protections for children are “not up for negotiation” in trade talks, amid speculation that legislation could be watered down to secure an agreement.
Asked whether the Online Safety Act could be altered, he told Sky News: “It’s really important for us to have those protections for children and vulnerable people online.
“Those important protections are not up for negotiation. Those basic protections are things we want to keep.”
Shadow chancellor Mel Stride told Sky News: “Our hope now is that the Government steps up to the plate, moves forward rather more quickly in order to secure a deal because that is the best solution for our country.”
Experts predicted that UK economic growth – already expected to amount to just 1% this year – could be up to 0.5 percentage points lower than expected over coming years as a result of the tariffs.
Thomas Pugh, economist at RSM UK, said he believed the tariffs would be “not far off” wiping out Chancellor Rachel Reeves’s fiscal headroom by the time she announces her second budget in the autumn.
Last week, the Office for Budget Responsibility warned that Ms Reeves’s headroom against her debt target would be at serious risk if tariffs were imposed.
If this proves to be correct, the Chancellor will face the prospect of imposing more spending cuts or tax rises if she does not change her fiscal rules.
