In a critical address at MakeUK’s National Manufacturing Conference in London, Chancellor Rachel Reeves warned that the UK’s economy is poised to suffer due to President Trump’s escalating trade war, regardless of any bilateral trade deal. She asserted, “Even if tariffs aren’t applied to the U.K., we will be affected by slowing global trade, slower GDP growth, and higher inflation.” This statement comes in response to Trump’s recent decision to impose a 25 percent tariff on goods from Mexico and Canada and to double duties on Chinese goods.
Reeves emphasised the need to avoid tariffs during her speech to hundreds of British manufacturers, expressing optimism about the possibility of a UK-U.S. trade deal. She highlighted the importance of negotiations with the U.S. following Prime Minister Keir Starmer’s recent discussions with Trump, as the UK seeks to sidestep Trump’s tariff threats. Meanwhile, Trump suggested that both sides could reach a trade deal that would remove the need for tariffs.
Despite the potential for a trade deal, the Chancellor noted that duties on UK steel and aluminium exports are set to be imposed shortly, with reciprocal tariffs on British goods expected next month. In light of these challenges, Starmer has pledged to increase defence spending to 2.5 percent of the UK GDP by 2027. Reeves emphasised the importance of ensuring that this increased spending supports British jobs and industries, stating, “Strong security is the bedrock of a strong economy,” while outlining plans to ease regulations on defence procurement and review contract rules for single-source suppliers.
Chancellor Rachel Reeves warned that the UK economy will be adversely impacted by Trump’s trade war, even with a trade deal in place. She highlighted potential slowdowns in global trade, GDP growth, and inflation. Despite these threats, there is hope for negotiation with the U.S. to avoid tariffs, particularly following Prime Minister Starmer’s meetings with Trump. The UK plans to increase defence spending while supporting local industries.
Chancellor Rachel Reeves has highlighted the significant economic challenges the UK faces due to President Trump’s trade policies, regardless of a potential trade deal. The imposition of tariffs is expected to dampen the UK’s economic growth and increase inflation levels. Amidst ongoing negotiations, the government aims to bolster British industry and safeguard jobs through increased defence spending and streamlined procurement processes, underlining the critical link between national security and economic stability.
Original Source: www.politico.eu
