With your permission Madam Deputy Speaker, I would like to make a statement on the United Kingdom’s economic relationship with the United States.
The UK has a strong and balanced trading relationship with the US worth £315 billion which supports 2.5 million jobs across both countries. This is second only to the EU where our trading relationship is worth £791 billion.
Yesterday evening, the United States announced a 10% reciprocal tariff on UK exports and have today imposed a 25% global tariff on cars. This follows the application of tariffs of 25% on US imports of steel, aluminium and derivative products that was announced on 12 March.
No country was able to secure an exemption from these announcements, but the UK did receive the lowest reciprocal tariff rate globally. And though this vindicates the pragmatic approach this Government has taken, we know that while these tariffs are still being levied, the job is far from done.
We are, of course, disappointed by the increase in tariffs on the UK, and on other countries around the world. The impact will be felt amongst all trading nations. But I would like to update the House on how the UK can navigate these turbulent times, acting in our national interest and for the benefit of all our industries.
I would also like to take this opportunity to thank my American counterparts, Secretary of Commerce Howard Lutnick, US Trade Representative Jamieson Greer and Special Envoy Mark Burnett for their engagement over the last few months. While any imposition of tariffs is deeply regrettable, from the beginning, they promised to make themselves available and have been true to their word, and I look forward to our continued engagement over the days ahead.
As Members will know, since the new US administration took office, my colleagues and I have been engaged in intensive discussions on an economic deal between the US and the UK. One that would not just avoid the imposition of significant tariffs but that would deepen our economic relationship. On everything from defence, economic security, financial services, machinery, tech and regulation there are clear synergies between the US and UK markets. And this is reflected in the fair and balanced trading relationship that already exists between our two countries.
I can confirm to the House that those talks are ongoing and will remain so. It is this Government’s view that a deal is not just possible, it is favourable to both countries. And that this course of action serves Britain’s interests as an open-facing trading nation. I have been in contact with many businesses, across a broad range of sectors including those most affected, who have very much welcomed this approach. It is clear to me that industry themselves want to grasp the opportunity a deal can offer and they welcome this government’s cool-headed approach.
Madam Deputy Speaker, in increasingly insecure times – I have heard some Members cling to the security of simple answers and loud voices. I understand the compulsion, but I caution members of this House to keep calm and remain clear eyed on what is in our national interest not to simply proclaim that we follow the actions of other countries.
The British people rightly expect this Government to keep our country secure at home and strong abroad. An unnecessary, escalating trade war would serve neither purpose.
True strength comes in making the right choices at the right time. And thanks to the actions of our Prime Minister, who has restored Britain’s place on the world stage, the UK is in a unique position to do a deal where we can – and respond when we must.
It remains our belief that the best route to economic stability for working people is a negotiated deal with the US that builds on our shared strengths. However, we do reserve the right to take any action we deem necessary if a deal is not secured.
To enable the UK to have every option open to us in the future, I am today launching a request for input on the implications for British businesses of possible retaliatory action. This is a formal step, necessary for us to keep all options on the table. We will seek the views of UK stakeholders over four weeks until 1st May 2025 on products that could potentially be included in any UK tariff response. This exercise will also give businesses the chance to have their say, and influence the design of any possible UK response.
If we are in a position to agree an economic deal with the US that lifts the tariffs that have been placed on our industries, this request for input will be paused, and any measures flowing from that, will be lifted.
Further information on the request for input will be published on gov.uk later today, alongside an indicative list of potential products that the Government considers most appropriate for inclusion.
I know this will be an anxious time for all businesses, not just those with direct links to America. Let me say very clearly that we stand ready to support businesses through this. That starts by making sure they have reliable information. Any business which is concerned about what these changes mean for them can find clear guidance and support on great.gov.uk where there is now a bespoke webpage.
Madam Deputy Speaker, this Government was elected to bring security back to working people’s lives. At a time of volatility, businesses and workers alike are looking to the Government to keep our heads, to act in the national interest and navigate Britain through this period. And while some urge escalation, I simply will not play politics with people’s jobs.
This Government will strive for a deal that supports our industries and the well-paid jobs that come with them, while preparing our trade defences and keeping all options on the table.
It is the right approach to defend the UK’s domestic industries from the direct and indirect impacts of US tariffs in a way that is both measured and proportionate, while respecting the rules-based international trading system.
As the world continues to change around us, British workers and businesses can be assured of one constant: that this is a Government that will not be set off course in choppy waters. So the final part of our approach will be to turbo boost the work this government is doing to make our economy stronger and more secure including our new industrial strategy. We will strike trade deals with our partners, and work closely with our allies for our shared prosperity.
We have a clear destination to deliver that economic security for working people.
We are progressing a deal that can do that, we are laying the foundations to move quickly should it not, and we are ensuring British businesses have a clear voice in what happens next. And I commend this statement to the House.