With Trump due to unleash a global trade war with tariffs on Wednesday, the UK is now preparing to retaliate while still making a big offer to get a trade deal over the line
Your support helps us to tell the story
Support Now
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.
Keir Starmer is considering retaliatory measures against the US after abandoning hopes the UK can avoid direct tariffs set to be unleashed by Donald Trump this week.
The prime minister has suggested he could follow the EU and Canada’s lead on retaliatory tariffs, vowing to “act in the national interest” and “leaving everything on the table”.
At the beginning of last week there had been optimism that the UK would avoid direct levies planned for the EU, China and Canada among others. And there was even a hope that the UK/US trade deal might still be completed in time for 2 April.
But a highly placed source admitted that once President Trump confirmed 25 per cent tariffs on imported vehicles last Wednesday, “negotiations became much harder” for the UK government.
Another source told The Independent: "After the business with cars, tariffs look inevitable now."
US President Donald Trump and Prime Minister Sir Keir Starmer agreed to consider a deal at the White House (Carl Court/PA)open image in gallery
US President Donald Trump and Prime Minister Sir Keir Starmer agreed to consider a deal at the White House (Carl Court/PA) (PA Wire)
It comes after Sir Keir’s attempts to woo the US president with a state visit and public praise of his attempts to bring peace in Ukraine appear to have failed to persuade Trump to exclude Britain from a trade war.
However, sources have told The Independent that the UK is still dangling the prospect of ditching the planned digital services tax if the Trump administration is ready to sign a new trade deal that could avoid tariffs.
The 2 per cent levy on tech companies would have raised £1bn but had provoked the ire of X owner and Trump ally Elon Musk, as well as Vice President JD Vance who clashed with Sir Keir on the issue in the Oval Office last month.
The US/UK deal is based largely around future technologies such as artificial intelligence and bioscience. While it is “not a traditional trade deal” - avoiding complicated agriculture issues, such as US chlorinated chicken, and manufacturing including car production - business secretary Jonathan Reynolds has been crisscrossing the Atlantic in a bid to get a deal done and attempt to talk the Americans out of imposing tariffs.
With 2 April being dubbed “World Tariff Day” because it is when President Trump is set to unleash tariffs around the globe, UK ministers are “now prepared for any eventuality”.
The US president is describing it as "Liberation Day” claiming it will rebalance America’s trading relations but a source close to the prime minister insisted that he was sticking to his line that “the UK and US have a fair and balanced relationship in which the US has a slight surplus”.
The Downing Street source noted: “We will continue to talk after 2 April but we are now actively preparing for all eventualities.
“The prime minister will act in the national interests and reserves the right to retaliation.”
Starmer had a successful meeting with Trump in the White Houseopen image in gallery
Starmer had a successful meeting with Trump in the White House (POOL/AFP via Getty Images)
The Treasury and Department for Business and Trade (DBT) have been wargaming different outcomes but one senior minister admitted that “the problem is [Trump] is completely unpredictable.”
“The conversations we are having are good and productive but you never know until you know,” the minister added.
Direct tariff or not, the UK will still be harmed because trade barriers imposed against the EU and Canada and other trading partners “will have a significant impact on supply chains”.
Talks started last week on the main strands of a UK/US trade deal with Mr Reynolds meeting his American counterpart Howard Lutnick.
“The meeting went very well, Lutnick seems to be enthusiastic about getting a deal done,” a source said.
“You have to remember it is a fairly specialised trade deal and quite unusual.”
While Trump has said he believes a deal can be “done quickly” there is still no timeline for completion.
However, there are concerns that the tech side of it will be led by Vice President Vance who has already made an issue of wanting to impose tariffs on the UK over alleged attempts to close down free speech with online protection laws.
A source noted that the offer of scrapping the planned digital services tax “could appease Vance’s issues with the UK and tech industry”. And there are hopes foreign secretary David Lammy’s “close relationship” with the vice president “will help ensure problems are kept to a minimum”.
The governor of the Bank of England Andrew Bailey has already warned that the threatened extra charges – of up to 25 per cent - on imports to the US pose a major threat to the UK’s already faltering economic growth.
Last weekend, Ms Reeves told Sky News she had “confidence in our negotiators” working to try to secure a carve out for the UK.