Capital Economy, Business and Finance
Labour has affected unconcern about the potential impact of Trump’s plans to slap tariffs on goods coming into the US, despite concerns it could undermine the UK government’s growth ambitions.
Rachel Reeves, the chancellor, told MPs she was “confident” the £311 billion trade flow between the two countries would continue once the president-elect takes the reins in January.
“I don’t think that is about being protectionist. It is about being a realist in economic policymaking,” she said. During the campaign, Trump vowed to introduce tariffs of 60 per cent on all Chinese goods and between 10 and 20 per cent on all other imports.
During his first term, Trump’s tariffs on steel and aluminium from the EU started a trade war and experts have warned things may be worse the second time around.
Some analysts argue the UK is at risk of suffering collateral damage. According to Eurasia Group, the Department for Business and Trade is under pressure from industry to draw up contingency plans focusing on cars and whisky, which are thought to be most at risk from any US levies.
That could result in fresh impetus to secure a better trading relationship with the EU; but Trump has made no secret of his antipathy towards the bloc in the past, and there are warnings that he could try to sabotage any UK-EU rapprochement.
Labour has bet the farm on growth, and the Trump presidency adds complexity to an already challenging goal.
