Sir Keir Starmer has vowed to “keep all options on the table” after Donald Trump imposed a “very concerning” 25% tariff on all imported cars into the US.
The move ratchets up the global trade war that Mr Trump promised he would ignite upon entering the White House for a second term.
Speaking in Paris on Thursday, the prime minister 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 prime minister 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.”
Earlier, Chancellor Rachel Reeves told Wilfred Frost on Sky News Breakfast that the UK does not want to “escalate” Mr Trump’s trade wars.
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.
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.
Sir Keir Starmer and Donald Trump have discussed the “productive negotiations” towards a UK-US “economic prosperity deal”, Downing Street has said.
The two leaders discussed a possible deal in a phone call on Sunday and agreed negotiations will “continue at pace”, according to a statement.
A Downing Street spokesperson said: “The prime minister spoke to president Trump this evening.
“The president opened by wishing His Majesty the King best wishes and good health.
“They discussed the productive negotiations between their respective teams on a UK-US economic prosperity deal, agreeing that these will continue at pace this week.
“Discussing Ukraine, the prime minister updated the president on the productive discussions at the meeting of the Coalition of Willing in Paris this week. The leaders agreed on the need to keep up the collective pressure on Putin.
“They agreed to stay in touch in the coming days.”
Earlier this week, Mr Trump announced a new 25% tariff on all imported cars – threatening UK producers’ largest single export market.
Signing an executive order on Wednesday, Mr Trump said the tax would kick in on 2 April – what he has called “liberation day”.
British manufacturers such as Jaguar Land Rover, Bentley, Aston Martin and Rolls-Royce stand to be worst affected by the tariffs.
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Trump ‘wants lasting peace in Ukraine’
But the government has signalled it would not retaliate – mirroring its response to the tariffs on steel and aluminium imposed globally by the Trump administration earlier this month.
Tariffs are a key part of Mr Trump’s efforts to reshape global trade relations.
He plans to impose what he calls “reciprocal” taxes on “liberation day” that would match tariffs and sales taxes levied by other nations. The extent of potential tariffs and countries affected remains unclear.
He has already placed a 20% tax on all imports from China.
He also placed 25% tariffs on Mexico and Canada, with a lower 10% tariff on Canadian energy products in addition to the duties on all steel and aluminium imports, including those from the UK.
The two leaders spoke last Sunday in a “brief call” about the economic prosperity deal, and again nearly three weeks ago ahead of the US-Ukraine talks in Saudi Arabia.
Mr Starmer and Mr Trump appeared to have a warm personal relationship when they met in the Oval Office last month.
But just a day later, the US president along with vice president JD Vance delivered a dressing down to Ukrainian president Volodymyr Zelenskyy – marking a major shift in the US approach to Ukraine and cementing Mr Starmer’s position as a bridge between Europe and the US in the peace talks.
Mr Starmer and Mr Trump also spoke twice before they met in person.
The government plans to change the law so it can overrule Sentencing Council guidelines following a row over “two-tier justice”, Sky News understands.
The independent Sentencing Council, which sets out sentencing guidance to courts in England and Wales, has been at odds with Justice Secretary Shabana Mahmood for weeks after it updated its guidance.
It said that from April, a pre-sentence report, the results of which are taken into account when considering a criminal’s sentence, will “usually be necessary” before handing out punishment for someone from an ethnic, cultural or faith minority, alongside other groups such as young adults aged 18 to 25, women and pregnant women.
Conservative shadow justice minister Robert Jenrick called the guidance “two-tier justice” and said there was “blatant bias” against Christians and straight white men, as he said it would make “a custodial sentence less likely for those from an ethnic minority, cultural minority, and/or faith minority community”.
Ms Mahmood had called on the Sentencing Council to reverse the guidance, but it refused, which Sir Keir Starmer said he was “disappointed” with, and the justice secretary called “unacceptable”.
Image: Sir Keir Starmer said he was ‘disappointed’ the Sentencing Council will not reverse its guidelines. File pic: Reuters
Before the weekend, Sir Keir said “all options are on the table” over how the government might respond.
But sources have now told Sky News the Ministry of Justice plans to legislate at the “earliest opportunity” to be able to overrule sentencing guidelines.
Ministers could introduce the legislation as early as Monday so they can “push it through parliament”, so the current guidelines can be changed quickly.
Until the law is changed so the government can dismiss the Sentencing Council guidelines, the body can plough ahead with the changes as it is independent of the state.
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‘Blatant bias against straight, white men’
In reply to Ms Mahmood’s letter calling for a reversal, the Sentencing Council’s chair, Lord Justice William Davis, said on Friday that the reforms reflect evidence of disparities in sentencing outcomes, disadvantages faced within the criminal justice system and complexities in the circumstances of individual offenders.
He said pre-sentence reports allow judges to be “better equipped” to “avoid a difference in outcome based on ethnicity”.
“The cohort of ethnic, cultural and faith minority groups may be a cohort about which judges and magistrates are less well informed,” he added.
Sky News has contacted the Sentencing Council for a comment on the potential law changes.
Concerns over a global trade war continue to pressure traditional and cryptocurrency markets as investors brace for a potential tariff announcement from US President Donald Trump on April 2 — a move that could set the tone for Bitcoin’s price trajectory throughout the month.
Trump first announced import tariffs on Chinese goods on Jan. 20, the day of his inauguration as president.
Global tariff fears have led to heightened inflation concerns, limiting appetite for risk assets among investors. Bitcoin (BTC) has fallen 18%, and the S&P 500 (SPX) index has fallen more than 7% in the two months following the initial tariff announcement, according to TradingView data, TradingView data shows.
“Going forward, April 2 is drawing increased attention as a potential flashpoint for fresh US tariff announcements,” Stella Zlatareva, dispatch editor at digital asset investment platform Nexo, told Cointelegraph.
Investor sentiment took another hit on March 29 after Trump pressed his senior advisers to take a more aggressive stance on import tariffs, which may be seen as a potential escalation of the trade war, the Washington Post reported, citing four unnamed sources familiar with the matter.
The April 2 announcement is expected to detail reciprocal trade tariffs targeting top US trading partners. The measures aim to reduce the country’s estimated $1.2 trillion goods trade deficit and boost domestic manufacturing.
Despite mounting uncertainty, large Bitcoin holders — known as “whales,” with between 1,000 BTC and 10,000 BTC — have continued to accumulate.
Addresses in this category have remained steady since the beginning of 2025, from 1,956 addresses on Jan. 1 to over 1,990 addresses on March 27 — still below the previous cycle’s peak of 2,370 addresses recorded in February 2024, Glassnode data shows.
“Risk appetite remains muted amid tariff threats from President Trump and ongoing macro uncertainty,” according to Iliya Kalchev, dispatch analyst at Nexo, who told Cointelegraph:
“Still, BTC accumulation by whales and a 10-day ETF inflow streak point to steady institutional demand. But hawkish surprises — from inflation or trade — may keep crypto rangebound into April.”
The US spot Bitcoin exchange-traded funds halted their 10-day accumulation streak on March 28 when Fidelity’s ETF recorded over $93 million worth of outflows, while the other ETF issuers registered no inflows or outflows, Farside Investors data shows.
Despite short-term volatility concerns, analysts remained optimistic about Bitcoin’s price trajectory for late 2025, with price predictions ranging from $160,000 to above $180,000.