The UK is prepared to retaliate against US tariffs, with the government engaged in intense negotiations to secure an exemption from a 25% tax on car imports set to take effect on April 2.
The UK is prepared to retaliate against US tariffs if necessary, according to Downing Street sources. The government is engaged in last-minute negotiations with the White House ahead of a 25% tax on car imports and threats of wider tariffs on other goods set to take effect on April 2.
The UK is trying to secure an exemption from the tariffs, arguing that its trading relationship with the US is relatively equal compared to other countries. ‘Its trading relationship with the US is relatively equal,’ said the prime minister. The prime minister has stated his commitment to avoiding a trade war and will instead focus on ‘intense negotiations’ to find a mutually beneficial solution.
The 25% levy on car imports will start on April 3, with taxes on parts set to begin in May or later. This move is part of a series of tariffs introduced by US President Donald Trump, aimed at protecting American manufacturers and jobs. However, experts warn that the tariffs could lead to increased prices for consumers, strain relations with allies, and even trigger a temporary shutdown of significant car production in the US.
The United States imposes tariffs on imported goods to protect domestic industries and generate revenue.
Tariffs are taxes levied on foreign-made products, typically expressed as a percentage of the product's value.
The US Trade Representative (USTR) determines which countries face tariffs, usually in response to unfair trade practices or national security concerns.
The Harmonized System (HS) code classifies goods for tariff purposes.
Tariff rates vary by category and country, with some products facing higher rates than others.

The UK has several options to retaliate against US tariffs, including imposing duties on sectors where British products are particularly important to the US or focusing on specific products like ‘Harley Davidson motorcycles’ . However, one expert described targeting financial services as a ‘nuclear’ and most unlikely possibility.
The UK's retaliatory measures are governed by the Trade and Cooperation Agreement (TCA) with the European Union.
These options allow the UK to impose tariffs or other trade restrictions on EU goods in response to unfair trading practices.
The UK can also use its 'safeguard clause' to protect domestic industries from imports that cause or threaten material injury.
Additionally, the UK's Trade Remedies Authority (TRA) investigates and enforces trade remedy cases, including anti-dumping and countervailing duties.
Statistics show that in 2020, the UK imposed tariffs on €2.7 billion worth of EU goods.
World leaders have criticized the tariffs, with German Economy Minister Robert Habeck calling for the European Union to respond firmly and France’s President Emmanuel Macron labeling it a ‘waste of time‘. The SMMT has expressed disappointment at the announcement from Trump, citing the potential impact on UK car exports worth £7.6 billion per year.
The imposition of tariffs by the 'United States' has sparked widespread criticism from other countries.
China, the European Union, and Canada have been among the most vocal critics, accusing the 'US of protectionism and trade wars.'
The World Trade Organization (WTO) has also expressed concerns about the impact of tariffs on global trade.
According to a study, the 'US tariffs' have led to a 10% decline in international trade between the 'US' and its top trading partners.
The European Union has threatened to impose retaliatory tariffs on US goods, while China has halted imports of certain US agricultural products.
A reciprocal trade war would have significant economic consequences, according to the independent Office for Budget Responsibility. It warns that such a scenario would wipe billions off economic growth and all but eliminate the surplus left by the Chancellor to stay within her self-imposed fiscal rules.