Chancellor Rachel Reeves has said the UK does not want to “escalate” Donald Trump’s trade wars after the US president slapped a new 25% tariff on all imported cars.
Image: Chancellor Rachel Reeves has said the UK does not want to escalate Donald Trump’s trade wars
She said: “We’re not at the moment in a position where we want to do anything to escalate these trade wars.
“Trade wars are no good for anyone. It will end up with higher prices for consumers pushing up inflation after we’ve worked so hard to get a grip of inflation, and at the same time, will make it harder for British companies to export.
“So look, we are looking to secure a better trading relationship with the United States. I recognise that the week ahead is important.
“There are further talks going on today, so let’s see where we get to in the next few days.”
The chancellor’s answer does leave the door open to the UK potentially responding to the US president’s actions, which risks a huge impact for the UK’s car industry including manufacturers such as Jaguar Land Rover, Aston Martin and Rolls-Royce.
However, the UK government has sought to maintain a positive relationship with Mr Trump in a bid to avoid further punitive tariffs that he maintains are necessary to grow the US economy by boosting domestic manufacturing and protecting jobs.
Speaking in Paris later on Thursday, Prime Minister Sir Keir Starmer described the tariffs as “very concerning” and said the UK “will keep all options on the table” and “put the national interest first”.
“I think we need to keep, as ever, pragmatic and clear eyed. We are engaged, as you know, in intense discussions with the US on economic arrangements, on a number of fronts, including to mitigate tariffs,” the PM said.
“We will continue in that way because I think that, rather than jumping into a trade war, it is better pragmatically to come to an agreed way forward on this if we can.”
The move has affected UK products worth hundreds of millions of pounds.
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Spring statement 2025 key takeaways
While the European Union has announced it will impose retaliatory tariffs on the US, UK ministers have only said they are “disappointed” to see the tariffs on steel and aluminium and that “all options are on the table”.
Business Secretary Jonathan Reynolds previously said there would be no immediate retaliation by the UK government as negotiations continue over a wider trade deal with the US.
However, the fiscal watchdog said that while growth had been downgraded for this year, it had been upgraded for every year after for the rest of this parliament – which is due to end in 2029.
Living standards, as measured by household disposable income, will fall after this year to almost no growth in 2027-28 before rising again due to firms rebuilding profit margins, wage growth slowing, taxes rising, and welfare measures taking effect.
However, the OBR has warned this could easily be jeopardised by global events.
“If global trade disputes escalate to include 20 percentage point rises in tariffs between the USA and the rest of the world, this could reduce UK GDP by a peak of 1% and reduce the current surplus in the target year to almost zero,” it warned yesterday.
The prime minister’s spokesman has refused eight times to confirm whether recognition of Palestine could go ahead if Hamas remain in power and the hostages are not released.
Keir Starmer’s spokesman was questioned by journalists for the first time since the announcement last week that the UK will formally recognise the state in September – unless Israel meets certain conditions including abiding by a ceasefire and increasing aid.
The policy has been criticised by the families of UK hostages, campaigners and some Labour MPs, who argue it would reward Hamas and say it should be conditional on the release of the remaining hostages.
A senior Hamas politician, Ghazi Hamad, speaking to Al Jazeera, said at the weekend that major nations’ decision to recognise a Palestinian state “is one of the fruits of 7 October”.
The PM’s spokesman said on Monday: “The PM is clear that on 7 October, Hamas committed the worst act of terror in Israel’s history. That horror has continued since then.
“As the foreign secretary said over the weekend, Hamas are rightly pariahs who can have no role in Gaza’s future, there is a diplomatic consensus on that. Hamas must immediately release all hostages and have no role in the governance of Gaza.”
But asked whether removing Hamas from power and releasing hostages were conditions for statehood, he said a decision on recognition would be made at the UN General Assembly meeting in September, based on “an assessment of how far the parties have met the steps we have set out. No one side will have veto on recognition through their actions or inactions.”
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Up to 300 children could be evacuated from Gaza and given NHS treatment in the UK. The plans are reportedly set to be announced within weeks.
He added: “Our focus is on the immediate situation on the ground, getting more aid in to end the suffering in Gaza and supporting a ceasefire and a long-term peace for Israelis and Palestinians based a two-state solution.”
Starmer, who recalled his cabinet for an emergency meeting last week before setting out the new position, is following the lead of French president Emmanuel Macron, who first pledged to move toward recognising Palestinian statehood in April.
Canada has also backed recognition if conditions are met, including by the Palestinian Authority.
The prime minister had previously said he would recognise a state of Palestine as part of a contribution to a peace process.
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Efforts to bring Gazan children to the UK for urgent medical treatment are set to be accelerated under new government plans.
In his announcement last Tuesday, he said: “We need to see at least 500 trucks entering Gaza every day. But ultimately, the only way to bring this humanitarian crisis to an end is through a long-term settlement.
“So we are supporting the US, Egyptian and Qatari efforts to secure a vital ceasefire. That ceasefire must be sustainable and it must lead to a wider peace plan, which we are developing with our international partners.
“I’ve always said we will recognise a Palestinian state as a contribution to a proper peace process, at the moment of maximum impact for the two-state solution. With that solution now under threat, this is the moment to act.”
Adam Rose, a lawyer acting for British families of hostages in Gaza, has said: “Why would Hamas agree to a ceasefire if it knew that to do so would make British recognition of Palestine less likely?”
Former UK Chancellor and current Coinbase adviser George Osborne says the UK is falling behind in the cryptocurrency market, particularly when it comes to stablecoins.
At a press conference today in which Reform UK announced the Tory police and crime commissioner for Leicestershire was joining their ranks, as well as former prison governor Vanessa Frake, I asked Nigel Farage a simple question.
But his answer wasn’t what I expected.
I asked the Reform UK leader if the six-week campaign on law and order, with the tagline “Britain is Lawless”, was in fact project fear scaring people into voting for his party.
He utterly rejected that claim and responded to me saying: “No, they are afraid. They are afraid. I dare you, I dare you to walk through the West End of London after 9 o’clock of an evening wearing jewellery. You wouldn’t do it. You know that I’m right. You wouldn’t do it.”
I am not afraid to walk in the West End of London after 9pm wearing jewellery.
I have done it many times before and will continue to do so… but perhaps that is because I do not own a Rolex.
However, just because Farage is wrong on that point, doesn’t mean he isn’t tapping into other legitimate fears across the country.
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Snatch theft does worry me, hence why I now have a phone case with a strap attached to it that I can put around my body.
And I worry about knife crime in my area and what the impact could be if I were to have children – on the weekend someone was stabbed to death a stone’s throw from my house.
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Farage ‘not mincing his words’
However, if we look at the statistics, it is invariably a more nuanced picture than Farage or social media might have us believe.
And the Office for National Statistics (ONS) also notes that thefts outside of the home, eg phone snatching, has increased.
However, possession of weapons has fallen in London by 29% over the last three years.
And according to the ONS, crime in England and Wales is 30% lower than in 2015, and 76% lower than 1995.
And it is a similar picture for violent crime.
In short, am I right to be more worried that snatch theft and knife crime in London is increasing? Yes, and no.
But Nigel Farage is tapping into voters’ emotions – their feelings that the country is broken. It’s a picture the Conservative Party helped to create and the Labour Party happily painted to great effect during the general election campaign of 2024.
And the more politicians of all colours tell voters that “the system is broken”, the more voters might start to believe them.