US President Warned Against Imposing Heavy Trade Penalties on Britain

Trump Told Not to Impose Massive Tariffs on UK

The UK should be excluded from the tariffs Donald Trump is threatening to impose on exports to the US, according to business secretary Jonathan Reynolds. The US has no goods trade deficit with the UK, which occurs when a country imports more than it exports.

President Trump has doubled down on his threat to impose big tariffs on countries that sell products in the US. However, Reynolds believes there is an argument to be made for excluding the UK from these tariffs. “We know this is something that not just President Trump, but the whole of his administration takes very seriously,” he said.

Tariffs: A Central Part of Trump’s Economic Vision

Tariffs are a central part of Trump’s economic vision. He sees them as a way of growing the US economy, protecting jobs and raising tax revenue. However, he also uses them as leverage to pursue other policies. The prospect of higher taxes being introduced on imports to the US is concerning many world leaders because it will make it more expensive for companies to sell goods in the world’s largest economy.

UK Excluded from Tariffs?

The BBC asked whether the UK would be exempt from tariffs, given the absence of a trade deficit between the two nations. The president did not respond directly and instead spoke about the trading deficit the US and Canada have and his plans to rectify that. However, Reynolds believes that the UK’s services-based economy means it should be excluded from these tariffs.

Possible Trade Deal with EU

Separately, the business secretary said the UK had left open the possibility of following EU rules for food and farm products in order to return to frictionless access to European markets. This would involve mirroring EU rules and standards, but would not cross the government’s red lines. The comments came after EU Trade Commissioner Maros Sefcovic told the BBC that a new agreement, including so-called dynamic alignment on standards, is possible alongside other areas of pan-European co-operation on customs.

Government’s Twin-Track Strategy

Reynolds said Sefcovic’s tone was in keeping with what the government had already said about a “twin-track strategy” on trade. This involves improving the terms of trade with the EU while pursuing closer trade links around the world. Labour fought last year’s UK general election with a manifesto pledge to lower Brexit-related barriers and red tape for the export of food and farm products to the European Union.

The question has always been how deep such an agreement might be. It could be settled in the coming weeks, though firm decisions have not yet been made. The Conservatives have voiced anger at reports of a potential new deal on UK-EU trade, with shadow foreign secretary Dame Priti Patel telling MPs that the government was “bending the knee to the EU”. The Liberal Democrats have said the government is not doing enough to smooth trade with the EU.