UK braces for Trump’s tariffs as trade talks continue beyond Wednesday

The UK is expecting to be hit by Donald Trump’s tariffs this week, Downing Street has said, as discussions with the US are set to continue beyond Wednesday.

The Government has been trying to negotiate an exemption from the taxes on imports into the US which are set to come into force later this week.

The US president has announced a 25% import tax will be introduced on all cars imported to the US, a measure expected to hit British luxury car makers such as Rolls-Royce and Aston Martin.

The levy is on top of a series of tariffs set to come into effect on April 2, which could include a general 20% tax on UK products in response to the rate of VAT.

Sir Keir Starmer’s official spokesman said on Monday: "When it comes to tariffs the Prime Minister has been clear he will always act in the national interest and we’ve been actively preparing for all eventualities ahead of the expected announcements from President Trump this week, which we would expect the UK to be impacted by alongside other countries.

"Our trade teams are continuing to have constructive discussions to agree a UK-US economic prosperity deal.

"But we will only do a deal which reflects this Government’s mandate to deliver economic stability for the British people, and we will only act in the national interest."

Asked whether the Government had given up hope of a deal being signed before Wednesday, the spokesman said he is "not going to put a time frame on those discussions" but that they are "likely to continue beyond Wednesday".

He said that the UK will "take a calm and pragmatic approach in our response".

Sir Keir and Mr Trump discussed the "productive negotiations" the two nations have had towards an economic deal in a phone call on Sunday.

According to a Downing Street read out of the call, the two leaders agreed that "talks will continue at pace this week".

Mr Trump has branded April 2 "Liberation Day" for the US, as he claimed the tariffs he plans to introduce will free the US from foreign goods and boost its domestic economy.

The new taxes could make or break the Government’s plans to grow the economy, and they come into force just after Rachel Reeves made a series of cuts at the spring statement in order to restore a narrow buffer in the public spending headroom.

Asked whether the Government would be considering another budget in the event of being hit by tariffs, the spokesman said: The UK will "reserve the right" to respond to tariffs "in a way that does protect British industry", Downing Street has said.

Asked whether the Government would be considering another budget if the UK is hit by tariffs from Donald Trump, the Prime Minister’s official spokesman said: "We’ll obviously always take an approach that suits the British economy.

"We’ll have a budget in the autumn, and the OBR will obviously update the forecast at that point."

He also said that the UK will "reserve the right to respond in a way that does protect British industry".