LONDON — Chancellor Rachel Reeves has said the government will not do anything to “escalate” Donald Trump’s trade wars by retaliating to the U.S. president’s latest plan to slap a 25 percent duty on imported cars, as the U.K. holds out hope of an exemption.
The new tariffs, announced on Wednesday night, are due to go live on April 3, when Trump also plans on unveiling reciprocal tariffs against U.S. trade partners.
“This is the beginning of Liberation Day in America,” the president said from the Oval Office at the White House on Wednesday. “We’re going to take back just some of the money that has been taken from us.”
Despite the escalation, U.K. Chancellor Rachel Reeves told Sky News on Thursday morning: “We are 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.”
The chancellor added: “We are looking to secure a better trading relationship with the United States. I recognize 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.”
British car exports to the U.S. are worth some £8.3 billion annually, making them (at 14 percent) the largest share of U.K. goods exported to the U.S.
The U.K. already faces a 2.5 percent tariff on their passenger car exports to the U.S. and a 25 percent tariff on light trucks. Trump said his new duties would be in addition to those, raising the tariff rate for passenger cars to 27.5 percent and the rate for light trucks to 50 percent.
“These are worrying times for U.K. vehicle makers,” Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) said on Wednesday night. “Without substantive regulatory easements our manufacturing viability remains at risk and the U.K.’s transition to zero emission mobility under threat.”
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