The Prime Minister has vowed to keep open the option of retaliatory measures after Donald Trump imposed huge tariffs on global steel and aluminium imports.
Jobs could be at risk in the beleaguered British steel industry after the UK failed to secure an exemption to the extra import charges.
The European Union responded by announcing counter-measures hitting American goods with retaliatory tariffs from April, but Sir Keir Starmer on Wednesday resisted calls for the UK to immediately strike back.
During Prime Minister's Questions, he said: "I'm disappointed to see global tariffs in relation to steel and aluminium. We will take a pragmatic approach."
The UK is "negotiating an economic deal which covers and will include tariffs if we succeed," he told MPs. "But we will keep all options on the table."
Earlier Treasury Minister James Murray said the Government is negotiating “rapidly” towards a trade deal with the US following Mr Trump’s measures.
Mr Murray told Times Radio: “We're not going to retaliate immediately in that way.
“Obviously, the imposition of tariffs is disappointing, but we want to take a pragmatic approach and we're already negotiating rapidly toward an economic agreement with the US with the potential to eliminate additional tariffs.
“We think that the best way for the UK to respond is with a cool-headed, pragmatic, productive response working with the US, but whilst at the same time making absolutely clear that we will stand up for British industry and all options are on the table."
Business Secretary Jonathan Reynolds has described Mr Trump's plans as "disappointing" and said "all options" are on the table to respond in the national interest.
The Government estimates around 5% of UK steel exports and 6% of aluminium exports by volume go to the US, although the aluminium industry body said the US market accounts for 10% of exports - valued at £225million.
Brussels said counter-measures to the tariffs, which affect around 26 billion euros (around £22 billion) of EU exports, will be introduced "to defend European interests".
In a statement, the European Commission described the US measures as "unjustified trade restrictions".
Canada on Wednesday announced retaliatory tariffs on US imported goods worth C$29.8 billion ($20 billion) it will impose from Thursday in response.
Canada is the biggest foreign supplier of steel and aluminum to the United States.
Mr Trump has previously threatened to impose tariffs on other countries and then relented, but he remains wedded to the overall idea of making the US richer through taxing imports.
Mr Murray added: "We reserve our right to retaliate, but we want a pragmatic approach, working closely and productively with the US.
“We want to continue with that really important work which came out of the Prime Minister's successful visit to Washington last month.
“And we think that's in the best interest of British businesses and the British public."
Gareth Stace, director-general of trade association UK Steel, branded the Trump administration's move "hugely disappointing".
He added: "These tariffs couldn't come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape. What's more, the EU is also pushing ahead with trade restrictive action that will amplify the impact of US tariffs."
Nadine Bloxsome, chief executive of the Aluminium Federation, said: "The UK aluminium sector is already seeing the first impacts of these tariffs.
"The sharp rise in US premiums has created new incentives for scrap exports, raising the risk of significant domestic scrap leakage. This not only weakens the UK's recycling capacity but risks undermining our sustainability objectives and circular economy targets.”
