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UK Government Avoids Trade War Escalation Amid Trump’s Tariff Hike

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The UK government reassured on Thursday that it does not intend to escalate trade wars following Donald Trump’s announcement of a 25% tariff increase on the automotive sector. However, Prime Minister Keir Starmer emphasized that “all options remain on the table.”

Speaking on Sky News, UK Finance Minister Rachel Reeves stated that Britain does not wish to take any actions that could worsen trade tensions. This comes after Trump revealed on Wednesday that the new tariffs, effective April 2, would apply to all foreign-made cars.

The UK is currently negotiating with the United States to secure an economic agreement that might exempt it from these new import duties, which have already affected multiple countries.

Despite seeking diplomacy, Starmer stressed the importance of national interests, stating that the government would keep all options open during trade talks.

Economic Concerns Over Tariffs

Reeves warned that trade wars benefit no one, as they lead to higher consumer prices, increased inflation, and export difficulties for British businesses. The UK steel industry is already facing tariffs imposed by the US, but unlike the European Union, Britain has refrained from retaliatory measures, instead prioritizing diplomatic discussions.

Read also: Keir Starmer Congratulates Donald Trump and Seeks Stronger UK-US Ties

“We are currently engaged in intensive negotiations with our American counterparts, and we will assess the outcome next week,” Reeves added.

Earlier in the day, the UK automotive industry urged both London and Washington to find a trade agreement to avoid the damaging impact of tariffs.

Macron Urges Trump to Reconsider

French President Emmanuel Macron also commented on Trump’s move, expressing hope that the US leader would reverse his decision.

“This is not a good economic, geopolitical, or strategic decision,” Macron stated at a Paris conference supporting Ukraine. He pointed out the paradox of the US imposing tariffs on its closest allies.

UK Hopes for Trade Deal with the US

Since Brexit, which took effect on January 1, 2021, Britain has been eager to secure a trade agreement with the US.

Last month, during Starmer’s visit to Washington, Trump raised UK hopes by promising a “real trade deal” that would eliminate tariffs.

According to British media, London might reconsider its digital services tax—which affects US tech giants—as a bargaining tool to finalize an agreement.

Earlier this week, Starmer and Trump discussed trade negotiations in a phone call, following a visit to Washington by UK Trade Minister Jonathan Reynolds.

This article is originally published on icibeyrouth.com

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