Sir Keir Starmer has said US-UK trade talks are “well advanced” ahead of tariffs expected to be imposed by Donald Trump on the UK this week – but rejected a “knee-jerk” response.
Speaking to Sky News political editor Beth Rigby, the prime minister said the UK is “working hard on an economic deal” with the US and said “rapid progress” has been made on it ahead of tariffs expected to be imposed on Wednesday.
But, he admitted: “Look, the likelihood is there will be tariffs. Nobody welcomes that, nobody wants a trade war.
“But I have to act in the national interest and that means all options have to remain on the table.”
Sir Keir added: “We are discussing economic deals. We’re well advanced.
“These would normally take months or years, and in a matter of weeks, we’ve got well advanced in those discussions, so I think that a calm approach, a collected approach, not a knee-jerk approach, is what’s needed in the best interests of our country.”
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Downing Street said on Monday the UK is expecting to be hit by new US tariffs on Wednesday – branded “liberation day” by the US president – as a deal to exempt British goods would not be reached in time.
A 25% levy on car and car parts had already been announced but the new tariffs are expected to cover all exports to the US.
Jonathan Reynolds, the business and trade secretary, earlier told Sky News he is “hopeful” the tariffs can be reversed soon.
But he warned: “The longer we don’t have a potential resolution, the more we will have to consider our own position in relation to [tariffs], precluding retaliatory tariffs.”
He added the government was taking a “calm-headed” approach in the hope a deal can be agreed but said it is only “reasonable” retaliatory tariffs are an option, echoing Sir Keir’s sentiments over the weekend.
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0:28
‘Everything on table over US tariffs’
Mr Trump will unveil his tariff plan on Wednesday afternoon at the first Rose Garden news conference of his second term, the White House press secretary said.
“Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it,” Karoline Leavitt said.
“The president will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades. He’s doing this in the best interest of the American worker.”
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3:09
Trump’s tariffs: What can we expect?
Tariffs would cut UK economy by 1%
UK government forecaster the Office for Budget Responsibility (OBR) said a 20 percentage point increase in tariffs on UK goods and services would cut the size of the British economy by 1% and force tax rises this autumn.
Global markets remained flat or down on Monday in anticipation of the tariffs, with the FTSE 100 stock exchange trading about 1.3% lower on Monday, closing with a 0.9% loss.
On Wall Street, the S&P 500 rose 0.6% after a volatile day which saw it down as much as 1.7% in the morning.
However, the FTSE 100 is expected to open about 0.4% higher on Tuesday, while Asian markets also steadied, with Tokyo’s Nikkei 225 broadly unchanged after a 4% slump yesterday.
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Gaza and transatlantic trade are set to dominate talks between Donald Trump and Sir Keir Starmer when the pair meet in Scotland on Monday.
Downing Street said the prime minister would discuss “what more can be done to secure the ceasefire [in the Middle East] urgently”, during the meeting at the president’s Turnberry golf course in Ayrshire.
Talks in Qatar over a ceasefire ended on Thursday after the US and Israel withdrew their negotiating teams.
Mr Trump blamed Hamas for the collapse of negotiations as he left the US for Scotland, saying the militant group “didn’t want to make a deal… they want to die”.
Sir Keir has tried to forge close personal ties with the president, frequently praising his actions on the world stage despite clear foreign policy differences between the US and UK.
The two leaders are expected to discuss this agreement when they meet, with the prime minister likely to press the president for a lowering of outstanding tariffs on imports such as steel.
Prior to the visit, the White House said the talks would allow them to “refine the historic US-UK trade deal”.
Extracting promises from the president on the Middle East may be harder though.
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1:30
Should aid be dropped into Gaza?
Despite some reports that Mr Trump is growing frustrated with Israel, there is a clear difference in tone between the US and its Western allies.
As he did over the Ukraine war, Sir Keir will have to walk a diplomatic line between the UK’s European allies and the White House.
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0:45
Trump: ‘It doesn’t matter what Macron says’
The UK, French and German leaders spoke over the weekend and agreed to work together on the “next phase” in Gaza that would see transitional governance and security arrangements put in place, alongside the large-scale delivery of aid.
Under pressure from members of his own party and cabinet to follow France and signal formal recognition of Palestine, Sir Keir has gradually become more critical of Israel in recent months.
On Friday, the prime minister said “the starvation and denial of humanitarian aid to the Palestinian people, the increasing violence from extremist settler groups, and Israel’s disproportionate military escalation in Gaza are all indefensible”.
Government sources say UK recognition is a matter of “when, not if”, however, it’s thought Downing Street wants to ensure any announcement is made at a time when it can have the greatest diplomatic impact.
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1:19
Baby Zainab starved to death in Gaza
Cabinet ministers will be convened in the coming days, during the summer recess, to discuss the situation in Gaza.
The UK has also been working with Jordan to air drop supplies, after Israel said it would allow foreign countries to provide aid to the territory.
Downing Street says Ukraine will also likely be discussed in the meeting with both men reflecting on what can be done to force Russia back to the negotiating table.
After the meeting at Turnberry, the prime minister will travel with the president to Aberdeen for a private engagement.
Mr Trump is also expected to meet Scottish First Minister John Swinney while in the country.