Michelle ThompsonPrime Minister Sir Keir Starmer has signaled his readiness to use industrial policy to shield British businesses from the economic challenges expected from US President Donald Trump’s latest round of tariffs.
In a piece for the Sunday Telegraph, Starmer emphasized his intent to continue pursuing a US trade agreement to avoid some duties but also hinted at potential state intervention to safeguard national interests.
He acknowledged that some may be uneasy with government interference in the market but insisted that outdated thinking must be set aside in a rapidly changing world.
The UK was recently hit with a 10% baseline import duty. On top of that, a 25% tariff now applies to UK exports of cars, steel, and aluminium. Some countries will face tariffs as high as 50% starting 9 April.
Trump claimed the move aims to promote American-made goods and strengthen the US economy. However, his announcement—along with expected retaliation from other countries like China—sparked a market selloff, with global stocks dropping over 5% amid recession concerns.
Jaguar Land Rover responded by halting US shipments while adjusting to the new trade environment.
Starmer stated his government will ramp up efforts to boost UK competitiveness and reduce reliance on global markets. He reiterated readiness to apply industrial policy to support affected sectors.
Though tax hikes remain possible later this year, he noted no increases were introduced in the Spring Statement. Labour’s industrial strategy, promised during the general election, is set for release this summer, with some elements possibly expedited to aid businesses sooner.
In the Telegraph, Starmer maintained that the UK will remain calm while negotiating with the US but warned that all options are being considered. He stressed any deal must benefit British businesses and safeguard workers’ interests.
Conservative leader Kemi Badenoch urged the PM to finalize a strong trade agreement with the US that promotes growth without lowering standards.
Last year, the UK exported nearly £60 billion in goods to the US, including vehicles, pharmaceuticals, and machinery.
In response to the tariffs, the UK published a 400-page list of American products that could face counter-tariffs. Business Secretary Jonathan Reynolds said consultations will take place to assess the potential effects on UK firms.
The targeted items account for 27% of US imports, selected for their relatively low economic risk to the UK.
Starmer also pledged to lower trade barriers with other global partners to help offset the fallout from US tariffs.
He held talks with several world leaders over the weekend. In a conversation with French President Emmanuel Macron, both agreed that a trade war benefits no one, though all options remain open.
Meanwhile, the Conservatives and Liberal Democrats pointed out that UK businesses and families are already facing pressure from today’s rise in employer National Insurance contributions.
