Sir Keir Starmer has stated that his government is prepared to implement industrial policy to protect British businesses from the impact of Donald Trump’s new 10% tariff. The UK, along with several other countries, experienced the lowest import duty rate following the president’s announcement on April 2nd, dubbed ‘Liberation Day’, while countries like Vietnam, Cambodia, and China faced higher US levies.
The UK’s open economy is at risk of being harmed by a global trade war. The prime minister emphasized the need for a new approach in light of the 10% tax on British imports into America, which took effect on Saturday. Additionally, a 25% US levy on all foreign car imports was introduced on Thursday, prompting Jaguar Land Rover to announce a temporary halt in shipments to the US as businesses navigate the new taxes.
Sir Keir emphasized the importance of remaining calm and striving for the best deal amidst the tariffs. He pledged to enhance domestic competitiveness through industrial policy to support British businesses during this challenging period. It is anticipated that several announcements will be made soon to stimulate growth.
As of Sunday, the employer National Insurance Contributions (NICs) rate increased from 13.8% to 15%, while the salary threshold at which companies start paying NICs was lowered from £9,100 to £5,000. The FTSE 100 experienced its worst trading day since the start of the pandemic on Friday, with banks among the hardest-hit firms.
Sir Keir affirmed the government’s commitment to protecting Britain’s national interest and ensuring a focus on delivering for the country amid shifting global economic conditions. He emphasized the need for a new mindset to navigate the challenges ahead.
Countries like Cambodia, Vietnam, and China faced some of the highest tariff rates, with rates as high as 49% for Cambodia and 46% for Vietnam. French imports will face a 20% tariff, similar to the rate set for European Union nations, which will take effect on April 9th.
Sir Keir engaged in discussions with foreign leaders over the weekend, including French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni, and Australian Prime Minister Anthony Albanese, to address the tariff changes. Both Sir Keir and Mr. Macron agreed that while a trade war is not in anyone’s interest, all options should be considered to navigate the situation effectively.
In his message to Americans, President Trump warned that the tariffs would pose challenges but urged them to persevere. He highlighted the significant investments being made and emphasized the economic revolution underway, expressing confidence in a successful outcome despite the difficulties.
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Mr. Trump’s message underscores the importance of resilience and determination in the face of economic challenges and the promise of a historic outcome.
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