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Reeves in race to quash Trump’s tariffs which threaten to wipe out £10B headroom – but she WON’T ‘escalate’ trade war

Published on March 27, 2025 at 02:49 PM

Trump slaps 25% tariffs on ALL cars imported to US in huge blow to auto industry

BRITAIN is locked in “extensive talks”; with America to dodge Donald Trump’s punishing trade tariffs.

Rachel Reeves today made a plea for the US President to spare the UK from swingeing import duties.

President Donald Trump speaking at a reception.
Donald Trump announced 25 per cent car tariffs yesterday
Rachel Reeves giving a speech at a press conference.
Rachel Reeves suggested Britain would not hit back at Trump

The Chancellor suggested she would not impose retaliatory tariffs for fear of “escalating the trade war”;.

Mr Trump last night announced 25 per cent tariffs on all cars sold to the US from April 2 – which he has dubbed “Liberation Day”;.

America is Britain’s second largest car export market after the EU, with the levies likely to significantly hurt UK manufacturers.

Ms Reeves said officials were in “intense negotiations”; with the White House to avoid the tariffs before they come into effect.

She told Sky News: “We're not at the moment at a position where we want to do anything to escalate these trade wars.

“Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we've worked so hard to get a grip of inflation, and at the same time will make it harder for British companies to export.

“We are looking to secure a better trading relationship with the United States. I recognise that the week ahead is important. There are further talks going on today, so let's see where we get to in the next few days.”;

If Britain retaliates, it would push up the cost of American cars bought by UK consumers.

Mr Trump’s tariff spree could wipe 0.6 per cent off economic growth, the Office for Budget Responsibility warned yesterday.

The fiscal watchdog said this could rise to 1 per cent if the Chancellor hit back with reciprocal tariffs.

Appealing to US interests, Ms Reeves said: “A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined.”

Mr Trump had previously suggested Britain could be spared his tariffs, but did not exclude us from steel levies this month.

Tory Shadow chancellor Mel Stride said it is “very important” the UK has a trade deal with the US “that means we are protected from those tariffs”.

He said: “I think it's a balance between we want to make sure that we have the right relationship with America on all sorts of levels, including security as well as economic, in order to make sure we get the very best for our country.”

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