Diplomats urge Keir Starmer to respond robustly if Donald Trump enacts punitive tariffs on British exports, amid fears of a global trade war. The US plans 25% tariffs on key UK industries, raising concerns over potential UK economic growth reduction by 1%, as projected by the Office for Budget Responsibility. While Starmer appears cautious, awaiting to gauge Trump's tariffs, he is prepared to act in the national interest. However, he may choose a pragmatic approach to foster conditions for a larger UK-US trade deal, despite facing political pressure from opposition parties.
Starmer appears to be waiting to judge how to react, based on the level of any tariffs imposed on the UK. He is said by government officials to be ready to act in the national interest if Trump does hit the UK hard.
The Office for Budget Responsibility (OBR) warned last week that a 20% increase in tariffs... would cut UK growth by 1% and eliminate the 9.9bn of fiscal headroom.
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