British businesses affected by Donald Trump's recent tariff move are about to get some much-needed support. Sir Keir Starmer, the UK Prime Minister, is gearing up to reveal additional measures aimed at cushioning the impact of the 10% tariffs imposed on UK exports that began on April 6. This comes as a necessity, as these trade barriers have already started to rattle markets and UK enterprises.
Darren Jones, the Chief Secretary to the Treasury, mentioned on Sunday that more announcements are on the way. The UK government is stressing its commitment to shield its businesses from this economic storm. This approach contrasts sharply with allies like the European Union, which faces a 20% charge, and China, bearing a hefty 34% tariff. Jones points out that the UK's relatively lighter tariff is not due to luck but to persistent diplomatic negotiations with the US—a sort of 'Brexit dividend' as he calls it, post the UK's departure from the EU.
Interestingly enough, despite Trump's portrayal of Starmer as content with the 10% tariff, Jones appeared to set the record straight. He acknowledged the tariff rate as still unsatisfactory but marked the difference as a strategic advantage of the UK finding its trade footing outside the EU. Part of the discussion has been around food safety standards, with the government firmly standing its ground. Imports of controversial items, like chlorinated chicken from the US, will not be on the table, preserving high food safety protocols in any US trade deal.
Economic Ripples and Long-term Effects
The vibrations of these tariffs have sent a jolt through global markets, manifesting a wild ride with plunges in financial figures. The FTSE 100 alone saw a steep decline of over 7% in just a week. Globally, roughly $5 trillion evaporated from equities, painting a picture of worldwide market panic and uncertainty.
The UK is not taking this lying down. Discussions are ongoing with US counterparts to try and resolve this tariff impasse. But the UK has a plan B—a detailed, 417-page list of possible retaliatory actions targeting American products if necessary. Wes Streeting, the Health Secretary, is cautioning the public about looming disruptions—especially worries about the supply chains essential for medicines and manufacturing. He emphasizes the importance of vigilance and having backup plans in place.
While these tariffs and potential conflicts create tough challenges, the UK's proactive steps aim to soften the blow on businesses and the broader economy. Sir Keir Starmer's upcoming announcements could shed more light on how the UK plans to ride out this economic squall.
