The US is “our closest ally” but “nothing is off the table” in response to Donald Trump’s 10% tariffs on imports from the UK, the business secretary has said.
In a statement following the US president’s nearly hour-long address to the world, Business and Trade Secretary Jonathan Reynolds said: “We will always act in the best interests of UK businesses and consumers.
“That’s why, throughout the last few weeks, the government has been fully focused on negotiating an economic deal with the United States that strengthens our existing fair and balanced trading relationship.”
Mr Reynolds reiterated the statements from the prime minister and his cabinet over the past few days, saying the US is “our closest ally”, and the government’s approach is to “remain calm and committed to doing this deal, which we hope will mitigate the impact of what has been announced today”.
Image: Business Secretary Jonathan Reynolds says “nothing is off the table” following the tariffs announcement. Pic: PA
But he continued: “We have a range of tools at our disposal, and we will not hesitate to act. We will continue to engage with UK businesses, including on their assessment of the impact of any further steps we take.
“Nobody wants a trade war, and our intention remains to secure a deal. But nothing is off the table, and the government will do everything necessary to defend the UK’s national interest.”
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‘Get back round the negotiating table’, say Tories
The Conservative Party’s shadow business and trade secretary described the US president’s announcement as “disappointing news which will worry working families across the country”.
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6:39
Sky’s Ed Conway examines how economies across the world are impacted by tariffs
Andrew Griffith hit out at the government for having “failed to negotiate with President Trump’s team for too many months after the election, failed to keep our experienced top trade negotiator, and failed to get a deal to avoid the imposition of these tariffs by our closest trading partner”.
“The chancellor’s emergency budget of just a week ago with its inadequate headroom is now at risk, casting uncertainty about more taxes or spending cuts,” he continued. “Sadly, it is British businesses and workers who will pay the price for Labour’s failure.”
He called on ministers to “swallow their pride” and “get back round the negotiating table to agree a fair deal to protect jobs and consumers in both the UK and the US alike”.
Relief in Westminster – but concessions to Trump to come
It has been quite a rollercoaster for the government, where they went from the hope that they could avoid tariffs, that they could get that economic deal, to the realisation that was not going to happen, and then the anticipation of how hard would the UK be hit.
In Westminster tonight, there is actual relief because the UK is going to have a 10% baseline tariff – but that is the least onerous of all the tariffs we saw President Trump announce.
He held up a chart of the worst offenders, and the UK was well at the bottom of that list.
No 10 sources were telling me as President Trump was in the Rose Garden that while no tariffs are good, and it’s not what they want, the fact the UK has tariffs that are lower than others vindicates their approach.
They say it’s important because the difference between a 20% tariff and a 10% tariff is thousands of jobs.
Where to next? No 10 says it will “keep negotiating, keep cool and calm”, and reiterated Sir Keir Starmer’s desire to “negotiate a sustainable trade deal”.
“Of course want to get tariffs lowered. Tomorrow we will continue with that work,” a source added.
Another source said the 10% tariff shows that “the UK is in the friendlies club, as much as that is worth anything”.
Overnight, people will be number-crunching, trying to work out what it means for the UK. There is a 25% tariff on cars which could hit billions in UK exports, in addition to the blanket 10% tariff.
But despite this being lower than many other countries, GDP will take a hit, with forecasts being downgraded probably as we speak.
I think the government’s approach will be to not retaliate and try to speed up that economic deal in the hope that they can lower the tariffs even further.
There will be concessions. For example, the UK could lower the Digital Services Tax, which is imposed on the UK profits of tech giants. Will they loosen regulation on social media companies or agricultural products?
But for now, there is relief the UK has not been hit as hard as many others.
Liberal Democrat leader Sir Ed Davey has reacted furiously to Mr Trump’s announcement of a “destructive trade war”, and called on the government to stand up against “Trump’s attempts to divide and rule”.
“The prime minister should bring our Commonwealth and European partners together in a coalition of the willing against Trump’s tariffs, using retaliatory tariffs where necessary and signing new trade deals with each other where possible.”
Speaking on Wednesday evening at a White House event entitled ‘Make America Wealthy Again’, the US president unleashed sweeping tariffs across the globe.
Mr Trump held up a chart detailing the worst offenders – which also showed the new tariffs the US would be imposing.
The UK’s rate of 10% was perhaps a shot across the bow over the 20% VAT rate, though the president’s suggested a 10% tariff imbalance between the two nations. Nonetheless, tariffs of 10% could directly reduce UK GDP by between 0.01% and 0.06%, according to Capital Economics.
A 25% duty on all car imports from around the world is also being imposed from midnight in the US – 5am on Thursday, UK time.
The UK government had been hoping to negotiate an economic deal with the US in a bid to avoid the tariffs, but to no avail. The government says negotiations will continue.
The Confederation of British Industry said “negotiating stronger trading relationships with all like-minded partners will be foundational to any success”.
The business secretary is expected to make a statement in the House of Commons on Thursday, and we are also expecting to hear from the prime minister.
The first thing you notice when immigration officers stop a possible illegal moped delivery driver is the speed in which the suspect quickly taps on their mobile.
“We’re in their WhatsApp groups – they’ll be telling thousands now that we’re here… so our cover is blown,” the lead immigration officer tells me.
“It’s like a constant game of cat and mouse.”
Twelve Immigration Enforcement officers, part of the Home Office, are joining colleagues from Avon and Somerset Police in a crackdown on road offences and migrants working illegally.
The West of England and Wales has seen the highest number of arrests over the last year for illegal workers outside of London.
“It is a problem… we’re tackling it,” Murad Mohammed, from Immigration Enforcement, says. He covers all the devolved nations.
“This is just one of the operations going on around the country, every day of the week, every month of the year.”
Image: Murad Mohammed, from Immigration Enforcement, says his team are attempting to tackle the issue
Just outside the Cabot Circus shopping complex, we stop a young Albanian man who arrived in the UK on the back of a truck.
He’s on an expensive and fast-looking e-bike, with a new-looking Just Eat delivery bag.
He says he just uses it for “groceries” – but the officer isn’t buying it. He’s arrested, but then bailed instantly.
We don’t know the specifics of his case, but one officer tells me this suspected offence won’t count against his asylum claim.
Such is the scale of the problem – the backlog, loopholes and the complexity of cases – that trying to keep on top of it feels impossible.
This is one of many raids happening across the UK as part of what the government says is a “blitz” targeting illegal working hotspots.
Angela Eagle, the border security and asylum minister, joins the team for an hour at one of Bristol’sretail parks, scattered with fast food chains and, therefore, delivery bikes.
Image: Border security and asylum minister, Angela Eagle, speaks to Sky News
She says arrests for illegal working are up over the last year by 51% from the year before, to more than 7,000.
“If we find you working, you can lose access to the hotel or the support you have [been] given under false pretences,” she said.
“We are cracking down on that abuse, and we intend to keep doing so.”
There are reports that asylum seekers can rent legitimate delivery-driver accounts within hours of arriving in the country – skipping employment legality checks.
Uber Eats, Deliveroo, and Just Eat all told Sky News they’re continuing to strengthen the technology they use to remove anyone working illegally.
But a new Border Security Bill, working its way through Parliament, could see companies fined £60,000 for each illegal worker discovered, director disqualifications and potential prison sentences of up to five years.
“I had them all in to see me last week and I told them in no uncertain terms that we take a very tough line on this kind of abuse and they’ve got to change their systems so they can drive it out and off their platforms,” the minister tells me.
For some of those who arrive, a bike and a phone provide a way to repay debts to gang masters.
There were eight arrests today in Bristol, one or two taken into custody, but it was 12 hours of hard work by a dozen immigration officers and the support of the police.
As two mopeds are pushed onto a low-loader, you can’t help but feel, despite the best intentions, that at the moment, this is a losing battle.
We see the boat from a distance – the orange of the life jackets reflected in the rising sun.
And as we draw closer, we can make out dozens of people crowded on board as it sets off from the shore, from a beach near Dunkirk.
There is no sign of any police activity on the shore, and there are no police vessels in the water.
Instead, the migrants crammed into an inflatable dinghy are being watched by us, on board a private boat, and the looming figure of the Minck, a French search and rescue ship that soon arrives.
Image: Minck, a French search and rescue ship, shadows the boat
The dinghy meanders. It’s not heading towards Britain but rather hugging the coast.
A few of the passengers wave at us cheerfully, but then the boat starts to head back towards the shore.
Image: Sky’s Adam Parsons at the scene
As it nears a different beach, we see a police vehicle – a dune buggy – heading down to meet it.
Normal practice is for French police officers to slice through the material of any of these small boats that end up back on shore.
Two police officers get out of the buggy and wait. A police helicopter arrives and circles above, performing a tight circle over the heads of the migrants.
The police think they might be about to go back on to the beach; in fact, these passengers know that most of them are staying put.
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The boat stops a short distance from the shore and four people jump out. As they wade towards the beach, the boat turns and starts to head back out to sea.
We see the two police officers approach these four men and have a brief conversation.
They don’t appear to check the bags they are carrying and, if they do question them about why they left the boat, it is the most cursory of conversations.
In reality, these people probably don’t speak French but they were almost certainly involved in arranging this crossing, which is against the law. But all four walk away, disappearing into the dunes at the back of the beach.
The first thing you notice when immigration officers stop a possible illegal moped delivery driver is the speed in which the suspect quickly taps on their mobile.
“We’re in their WhatsApp groups – they’ll be telling thousands now that we’re here… so our cover is blown,” the lead immigration officer tells me.
“It’s like a constant game of cat and mouse.”
Twelve Immigration Enforcement officers, part of the Home Office, are joining colleagues from Avon and Somerset Police in a crackdown on road offences and migrants working illegally.
The West of England and Wales has seen the highest number of arrests over the last year for illegal workers outside of London.
“It is a problem… we’re tackling it,” Murad Mohammed, from Immigration Enforcement, says. He covers all the devolved nations.
“This is just one of the operations going on around the country, every day of the week, every month of the year.”
Image: Murad Mohammed, from Immigration Enforcement, says his team are attempting to tackle the issue
Just outside the Cabot Circus shopping complex, we stop a young Albanian man who arrived in the UK on the back of a truck.
He’s on an expensive and fast-looking e-bike, with a new-looking Just Eat delivery bag.
He says he just uses it for “groceries” – but the officer isn’t buying it. He’s arrested, but then bailed instantly.
We don’t know the specifics of his case, but one officer tells me this suspected offence won’t count against his asylum claim.
Such is the scale of the problem – the backlog, loopholes and the complexity of cases – that trying to keep on top of it feels impossible.
This is one of many raids happening across the UK as part of what the government says is a “blitz” targeting illegal working hotspots.
Angela Eagle, the border security and asylum minister, joins the team for an hour at one of Bristol’sretail parks, scattered with fast food chains and, therefore, delivery bikes.
Image: Border security and asylum minister, Angela Eagle, speaks to Sky News
She says arrests for illegal working are up over the last year by 51% from the year before, to more than 7,000.
“If we find you working, you can lose access to the hotel or the support you have [been] given under false pretences,” she said.
“We are cracking down on that abuse, and we intend to keep doing so.”
There are reports that asylum seekers can rent legitimate delivery-driver accounts within hours of arriving in the country – skipping employment legality checks.
Uber Eats, Deliveroo, and Just Eat all told Sky News they’re continuing to strengthen the technology they use to remove anyone working illegally.
But a new Border Security Bill, working its way through Parliament, could see companies fined £60,000 for each illegal worker discovered, director disqualifications and potential prison sentences of up to five years.
“I had them all in to see me last week and I told them in no uncertain terms that we take a very tough line on this kind of abuse and they’ve got to change their systems so they can drive it out and off their platforms,” the minister tells me.
For some of those who arrive, a bike and a phone provide a way to repay debts to gang masters.
There were eight arrests today in Bristol, one or two taken into custody, but it was 12 hours of hard work by a dozen immigration officers and the support of the police.
As two mopeds are pushed onto a low-loader, you can’t help but feel, despite the best intentions, that at the moment, this is a losing battle.