THE UK is not planning “at the moment” to introduce retaliatory tariffs on the US, Chancellor Rachel Reeves has said after Donald Trump imposed a new trade tax on car imports.
A 25% tariff on vehicles imported to the US will come into effect on April 2, the US president announced on Wednesday.
Reeves told Sky News: “We’re not at the moment at a position where we want to do anything to escalate these trade wars.
“Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we’ve worked so hard to get a grip of inflation, and at the same time will make it harder for British companies to export.”
She went on: “We are looking to secure a better trading relationship with the United States. I recognise that the week ahead is important. There are further talks going on today, so let’s see where we get to in the next few days.”
In an interview with Times Radio, the Chancellor said free trade is “good for both of our countries”.
She added: “A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined.”
Around four out of five cars made in the UK are exported.
Figures from industry body the Society of Motor Manufacturers and Traders show the US is the second largest export market after the European Union for cars built in the UK.
Some 16.9% of UK car exports were to the US last year.
Jaguar Land Rover could be one of the UK vehicle manufacturers most affected by tariffs.
