Minister due to face MPs after Trump tariffs unveiled

The Prime Minister is set to speak to business leaders while the Trade Secretary will look to calm markets on Thursday after Donald Trump slapped a 10% tariff on US imports of UK goods.

Jonathan Reynolds is due to address MPs on Thursday morning after Mr Trump confirmed sweeping import levies on countries across the world, hailing America’s “declaration of economic independence”.

He said on Wednesday evening that the UK is still seeking to do a deal with the US that “we hope will mitigate the impact” of the tariffs, but that “nothing is off the table” when it comes to a response.

Meanwhile, Downing Street suggested they had been vindicated in their approach to negotiating with the US in the hope of securing an exemption. The 10% tax facing UK goods is half that facing the EU.

In a speech from the White House rose garden, Mr Trump confirmed that from midnight in Washington, 5am Thursday in the UK, a 25% tariff would be imposed on all foreign cars imported to the US – a move which experts fear could cost 25,000 jobs in the British car industry.

And he indicated tariffs of 10% would apply to other products from the UK – the same level as the global “baseline” he was setting for countries around the world as part of his “reciprocal” measures from 5am on Saturday.

He also hit out at “exorbitant” VAT rates, which he described as a barrier to US firms.

No immediate retaliatory measures are expected from Westminster, as officials continue to focus on securing an economic deal with their counterparts in Washington.

The European Union is finalising its first package of countermeasures with commission president Ursula von der Leyen warning Europe is prepared for further retaliation if necessary.

In a speech early on Thursday, Ms Von der Leyen said: “We are prepared to respond.

“We are already finalising the first package of countermeasures in response to tariffs on steel and we’re now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.

“We (Europe) are in this together: if you take on one of us, you take on all of us. Our unity is our strength.”

Sir Keir Starmer is expected to meet with businesses on Thursday, after warnings that the changes will be a “blow” to UK firms.

The Federation of Small Businesses (FSB) warned the move will deal a “major blow” to small and medium businesses, who are already facing pressure from weak growth at home.

“The fallout will stifle growth, hurt opportunities, and put a serious dent in the global economy,” Tina McKenzie, the FSB’s policy chair said.

Other countries were hit by tougher tariffs from Mr Trump, including the EU who are facing 20%, Japan who are facing 24% and China who are facing 34% tariffs.

A Downing Street source said: “We don’t want any tariffs at all, but a lower levy than others vindicates our approach.

“It matters because the difference between 10% and 20% is thousands of jobs.

“We will keep negotiating, keep cool and keep calm. We want to negotiate a sustainable trade deal, and of course to get tariffs lowered. Tomorrow we will continue with that work.”

The 25% levy on cars had been expected, but the 10% rate on other goods was lower than had been expected, with fears that it could have been set at 20% to mirror VAT.

In a statement on Wednesday evening, Mr Reynolds said: “The US is our closest ally, so our approach is to remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today.

“We have a range of tools at our disposal and we will not hesitate to act.

“We will continue to engage with UK businesses including on their assessment of the impact of any further steps we take.

“Nobody wants a trade war and our intention remains to secure a deal. But nothing is off the table and the Government will do everything necessary to defend the UK’s national interest.”

The Conservatives described the tariff announcement as “disappointing news” that will “worry working families”, but suggested that Brexit had spared the UK from a higher rate of taxes.

Shadow trade secretary Andrew Griffith said: “The silver lining is that Brexit, which Labour ministers voted against no less than 48 times, means that we face far lower tariffs than the EU: a Brexit dividend that will have protected thousands of British jobs and businesses.”

Meanwhile, Liberal Democrat leader Sir Ed Davey suggested the situation calls for closer collaboration with Europe.

Accusing Mr Trump of kicking off a “destructive trade war”, Sir Ed said: “The Prime Minister should bring our Commonwealth and European partners together in a coalition of the willing against Trump’s tariffs, using retaliatory tariffs where necessary and signing new trade deals with each other where possible.”

The new tariff measures will remain in place indefinitely, the White House said on Wednesday evening, until Mr Trump has decided that “the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated”.

The dollar initially dropped sharply against other currencies while the President was speaking, but they began to ease back as he unveiled the whole package of measures.

He described it as “one of the most important days” in American history.

“It’s our declaration of economic independence,” he said.