The Government faces questions on how it will respond to US President Donald Trump’s latest trade announcement, which threatens to impose tariffs as a retaliation for charging VAT on US goods.
Most of Britain’s exports to the US are in the services sector, and it is unclear whether Thursday’s tariffs include services, although the UK does export more than £8 billion worth of cars and more than £6 billion worth of pharmaceutical products to America.
Canada and Mexico have readied retaliatory tariffs should the duties come into effect, as has the EU, which Mr Trump has repeatedly threatened, while China has already taken retaliatory steps to a 10% tariff on its exports to the US.
Mr Trump announced on Thursday that he would impose “reciprocal tariffs” on all other countries, charging the same amount as levies imposed on American exports, claiming it was “fair to all”.
Thursday’s tariffs will not come into effect immediately, with Mr Trump ordering his advisers to carry out investigations into other countries’ trade practices before suggesting what measures to impose.
