UK is ready for 'all eventualities' should Trump impose import tariffs on goods

Trade Secretary Jonathan Reynolds did not specify what measures he would take, but he emphasised the UK's preparedness

Trade Secretary Jonathan Reynolds has assured that the UK is ready for "all eventualities" should US President-elect Donald Trump impose import tariffs on British goods.

Trump, who has already revealed plans to impose tariffs on China, Canada and Mexico as part of his crackdown on illegal immigration and drugs, has hinted at a broader use of tariffs to safeguard American industry. He has proposed increasing tariffs on global imports by 10% or 20%, with a steep rise to 60% on Chinese goods.

In response, the UK could impose targeted tariffs on symbolically significant US products like whiskey, blue jeans and motorbikes, affecting brands such as Jack Daniel’s, Levi’s and Harley-Davidson, mirroring actions taken by Britain and the EU during trade wars in Trump's first term.

While Mr Reynolds did not specify what measures he would take, he emphasised the UK's preparedness. Speaking to the Commons Business and Trade Committee, he said: "This is the big question facing global trading relationships."

He advocated for "open, transparent, free trading relationships around the world", adding, "Yes, it’s true to say, if any country imposed tariffs on UK companies exporting, it would hurt our companies."

He also pointed out that such tariffs would harm consumers in the imposing country due to inflationary pressure and increased cost of living.

The Cabinet minister has admitted that a 20% tariff on UK exports to the US could have a "not insignificant" effect on Britain's economic growth. When quizzed about the Government's readiness for potential tariffs from Mr Trump, the minister stated: "I wouldn’t want to speculate, but the committee should assume that all eventualities have been prepared for."

The options in any trade dispute are do nothing, retaliate, or negotiate. On whether retaliatory measures against iconic American products like Harley-Davidson motorcycles were on standby, the Trade Secretary remarked: "You would expect this department to prepare for every eventuality. But I think we should just be a little bit sensitive at this stage about speculating about how we would respond to something which hasn’t happened."

Mr Reynolds pointed out that the trade imbalances the US has with other European countries don't really apply to the UK, suggesting that Mr Trump might not see the need to take the same actions against Britain. He elaborated: "There are a whole range of areas where we, as a country, I think could and should – if we could do it – welcome closer trading relationships with the US."

"The US is a fundamental ally of ours. We have an incredibly strong trading relationship as it stands, and when I look to areas like services, technology, critical minerals, if there was the opportunity to work more closely together, I don’t think anyone should turn around immediately and say ‘not interested in that’."

He conceded there were "challenges" in pursuing a tighter trade bond or striking a free-trade agreement, given the knock-on effects for the UK's key markets like the EU and China. He elaborated: "I don’t see the need at this stage to rule anything out or in, but to be realistic about where our national interest lies and being frank with the committee about the fact that any negotiation in any major principal market that we might do has to be considered not in isolation, but its relationship to other key markets, and what the consequences of that negotiation would mean for business and trade in those areas."

However, he was adamant that the forthcoming years shouldn't be seen as making a "binary choice" between deepening trade ties with either the US or the EU.