Chancellor Rachel Reeves has said the UK does not want to “escalate” Donald Trump’s trade wars after the US president slapped a new 25% tariff on all imported cars.
Mr Trump signed an executive order last night for the tax to kick in on 2 April – what he has called “liberation day”.
The move ratchets up the global trade war Mr Trump promised he would ignite on entering the White House.
But speaking to Wilfred Frost on Sky News Breakfast, the chancellor sought to diffuse the looming conflict when asked if the UK intended to respond.
She said: “We’re not at the moment in 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.
“So look, 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.”
The chancellor’s answer does leave the door open to the UK potentially responding to the US president’s action, which risks a huge impact for the UK’s car industry including manufacturers such as Jaguar Land Rover, Aston Martin and Rolls-Royce.
However, the UK government has sought to maintain a positive relationship with Mr Trump in a bid to avoid further punitive tariffs that he maintains are necessary to grow the US economy by boosting domestic manufacturing and protecting jobs.
The US president has already imposed tariffs on all steel and aluminium imports to the US, with them coming into effect on 12 March.
The move has affected UK products worth hundreds of millions of pounds.
