4th Apr 2025 09:04
(Alliance News) - The UK Foreign secretary has said he regrets America's "return to protectionism" after Donald Trump insisted Prime Minister Keir Starmer was "very happy" with Britain's tariff treatment.
David Lammy said people across the country were "very concerned" about how the move to slap 10% import taxes on goods would hit their own finances, and added "all options" remain on the table to respond in the national interest.
Ministers have insisted they will remain "cool and calm" as they seek to secure an economic deal to mitigate the damage to Britain, but are not ruling out the possibility of retaliatory levies on a range of American products.
But despite the UK government having made clear its disappointment in the tariffs, the US President told journalists on board Air Force One late on Thursday that the prime minister was "very happy" with the result.
Asked whether it was time for the UK to stand up to Trump, Lammy told reporters following a meeting with Nato counterparts in Brussels: "The UK, like France, is a great maritime nation.
"We are a nation that believes in open trade, and I regret the return to protectionism in the US, something that we've not seen for nearly a century.
"As you know, we are consulting with business and industry. At this time, we are engaged in discussions with the US to strike an economic agreement and an economic deal.
"And of course, we have been absolutely clear that all options are on the table as we ensure the national interests of the British people, who will be very concerned at this time about how this affects the bottom line for them and their economic welfare.
"We will put their national interest first, and it's in their national interests to be negotiating with the US an economic agreement at this time, but keeping all options on the table."
Trump had said of Starmer on Thursday: "We have a very good dialogue. I think he was very happy about how we treated them with tariffs."
French President Emmanuel Macron has gone further than the UK in criticising Trump's decision, denouncing it as "brutal and unfounded" decision after 20% tariffs were hiked on the EU.
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.
An "indicative list" published by the UK government on Thursday showed products that could be targeted as part of retaliatory action, 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 counter-measures.
The government still hopes for an "economic deal" with the US to secure some exemption from the tariffs, with Prime Minister Keir Starmer promising businesses on Thursday that he would "fight for the best deal for Britain".
But even with a deal, the global impact of Wednesday's tariffs is expected to cause a significant economic shock to the UK.
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 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.
By Nina Lloyd and Christopher McKeon
Press Association: Finance
source: PA
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