UK economy could be especially at risk from Trump’s tariff war, says minister
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Trade secretary says UK’s ‘globally oriented’ economy means it is vulnerable – but it is better positioned than China and EU. The UK government is worried a “tariff war” between the US and other countries could lead to higher inflation and unemployment, the trade secretary has said.
Jonathan Reynolds, the business and trade secretary, warned the UK was particularly vulnerable to the impact of US tariffs because it was a “very globally oriented economy” reliant on international trade and investment. During his election campaign, Donald Trump pledged to introduce a blanket 20% tax on all foreign goods to protect domestic industries, despite warnings that such a move would fuel US inflation.
British ministers are hoping that despite his pledge Trump, who will be inaugurated as president on Monday, will introduce more limited tariffs focusing on particular sectors and countries, which could spare the UK. Earlier, Trump refuted a report that his team was exploring tariff plans that would only cover critical imports.
Asked if he was worried about a tariff war, with countries responding to new US tariffs by introducing their own, Reynolds said: “I am, because the UK is a very globally oriented economy so the exposure, the danger to the UK is actually greater than even some comparable countries.”.
However, he argued that Trump was motivated by the US trade deficits with China and the EU, and that the UK was “in a different position”. He told Sky News: “We’re well-prepared for this, we’ve got a good argument to make, and I think there is a chance, actually if we play this right, to get an even better relationship out of some of these things that have been put forward. But we can’t be complacent – and there are risks, yes, of a tariff war.”.
