Trade war should not be UK's first response to tariffs - PM

The UK's first response to US tariffs should not be to jump into a trade war, Prime Minister Keir Starmer has said, as the government braces itself for the announcement of widespread taxes on imports.

US President Donald Trump will set out his plans for fresh levies on goods coming into his country in remarks to be delivered from the White House at 21:00 BST.

The government had been hoping to strike a deal that would see the UK dodge tariffs and although talks are ongoing, officials have become increasingly downbeat about the prospect of an agreement before Trump's announcement on Wednesday.

Sir Keir said his government was preparing for all eventualities and would rule nothing out.

The new tariffs will be on top of a 25% levy on car and car parts, already announced by the US president.

Diplomatic efforts are still ongoing, and as part of the efforts to get a deal, Lord Mandelson, the UK ambassador, has had meetings in the White House with JD Vance, the vice-president, and Susie Wiles, the president's chief of staff.

During Prime Minister's Questions, Conservative leader Kemi Badenoch said the prime minister's decisions had made the UK's economy "fragile" at a time when the world was facing a "global trade war".

She said the government should have taken up the "draft US trade deal" negotiated with the US by the previous Conservative government.

Badenoch also attacked the prime minister for losing "our most experienced trade negotiator" - a reference to Crawford Falconer, who left his role at the Department for Business and Trade last year.

"No wonder he can't get a tariff deal for British cars," Badenoch added.

She said 25,000 jobs were now at risk and asked the prime minister to set out "exactly what he is doing to protect the British car industry from his failure to negotiate".

Sir Keir said "constructive" talks were ongoing and that he would continue to take a "calm, pragmatic approach" avoiding "kneejerk reactions".

He added that as trade secretary, Badenoch had failed to secure a trade deal with the US.

Liberal Democrat leader Sir Ed Davey also raised the subject of tariffs. He said he hoped the prime minister would be able to cut a deal but added: "I increasingly fear a deal won't be good enough to avoid a global trade war."

He urged the prime minister to team up with European and Commonwealth countries to "stand against Trump's tariffs and for free trade".

Sir Keir replied: "I really do think it is not sensible to say the first response should be to jump into trade war with the US."

During the question session, Northern Ireland MPs raised particular concern about how tariffs could affect their constituencies, given the trade rules that were introduced after Brexit.

If the EU decides to introduced retaliatory tariffs on the US, it could create a situation where US goods entering Northern Ireland would have to pay EU tariffs but US goods entering the rest of the UK would avoid the additional taxes.

DUP MP Gavin Robinson asked if the government would consider taking steps to "either exempt Northern Ireland from EU action or take retaliatory action if they do not".

The prime minister said it was a "serious issues and we need to work together to resolve it".

Speaking to the BBC, Reform UK leader Nigel Farage said it was "very frustrating" that tariffs were being introduced but added that the UK was in a "a position to get out of them before anybody else" due to Brexit.

He said that unlike the EU, the UK's trade terms were "roughly in balance" adding: "If anybody can negotiate a deal to get rid of these tariffs, it's us."

Farage, who is an ally of Trump, said: "I'm sorry that Labour weren't able to do it, up until now. I did offer my help, I wasn't taken up on it."

David Miles, a member of the Office of Budget Responsibility which assesses the economy, said the impact of tariffs on the UK could be "pretty substantial" if kept in place for five years.

At a Centre for Policy Studies event, Miles said the OBR's forecast suggests tariffs could "knock something like between 0.6 and 1% off GDP (gross domestic product)".

"In some ways that's a pessimistic scenario, where not only the UK faces 20% tariffs, but they're in place for five years, which is of course beyond the next US presidential election."

Appearing before the Treasury Committee, Chancellor Rachel Reeves said she would not jeopardise the possibility of an economic deal with President Donald Trump by "posturing" over his plan for tariffs.

However, she added that even if the UK could reach a deal with the US, it could still be impacted by global tariffs, which she said could depress demand from overseas.