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Britain would be heavily exposed to a global trade war, UK business secretary Jonathan Reynolds has warned, as Sir Keir Starmer denied the country will have to choose between the US and Europe if Donald Trump brings in fresh transatlantic tariffs.
Reynolds told a House of Lords committee that “tariffs on UK goods entering the US would be a difficult thing for us to have to contend with”, but that the threat of an all-out global trade dispute is much greater.
“We’ve just got to be clear with the British people that if there was to be a much wider trade confrontation between China and the west, as a much more globally orientated trading nation, the UK is much more exposed to that than . . . the US is,” he said.
Trump has promised to impose global tariffs of 10-20 per cent on US imports — and up to 60 per cent on goods coming from China — in a move that could trigger a fresh wave of global protectionism.
Reynolds’ comments came as the UK prime minister claimed it was possible to have a strong trading relationship with both the US and the EU in the event of new trading barriers.
“We have always wanted trade arrangements both with the EU and with the US and as you know, I want to ensure we get a better deal with the EU,” Starmer told the Financial Times ahead of the G20 summit in Rio de Janeiro.
“I’ve spent a lot of time investing in those relationships. Of course I want the best possible trading relationship with the US as well and that’s the approach I’ll take.”
Over the weekend, a senior Trump adviser urged the UK to ditch a “socialist” Europe and align itself with the US “free enterprise” model.
Trump economic adviser, Stephen Moore, said on Saturday that Britain should align itself with the US rather than the “more socialist” European system.
Moore told the BBC: “I think the UK is kind of caught in the middle of these two forms of an economic model. I believe that Britain would be better off moving towards more of the American model of economic freedom.
“If that were the case, I think it would spur the Trump administration’s willingness to [do a] free trade agreement with the UK.”
Starmer, however, is anxious to avoid being seen to pick a side.
The EU is by far the UK’s biggest overall trade partner, accounting for £356bn or 42 per cent of all goods and services exports last year. However, the US is the UK’s largest single export nation.
Reynolds on Monday pointed out that Britain does more trade with European Union countries than the US: “If there are things that we are offered or asked to do [by the US] that would result in an adverse relationship on the European side we would have to weigh the consequences.”
The prime minister is hoping to negotiate a better trading arrangement with the EU in 2025, including agreeing a veterinary agreement to smooth the flow of agricultural products across the Channel.
But that effort could be complicated if Trump imposes trade tariffs on European countries, including Britain.
Any US offer to limit tariffs on Britain would almost certainly come with strings attached, including a long-standing demand for the UK to open its markets to low-cost US food products — such as chlorine-dipped chicken — that are currently banned in Britain and the EU.