Great Britain seems to be a strange participant in increasing the global trade war. When the European Union released tariffs on Chinese electric vehicles last year, the British refrained. Now Brussels and Washington are locked in battles triggered by the imposition of White Building steel tariffs – and once again, Britain for now avoids retaliation.
The attitude of Prime Minister Keir Starmer seems to be supine, but logical. Tit-for-tat levies punish domestic consumers and foreign exporters, and only make sense if you can affect your enemy. With Britain only produces 4% of US exports, according to data from the International Trade Center, it seems impossible. The 25% tariff of Trump may not be important even for the British steel sector, affecting less than 10% of its exports. A bigger problem is how the British overcome Chinese exports about excess metal capacity.
Remain neutral will be more difficult. The next Salvo Trump can involve what is called the reciprocal rate aimed at equating trading barriers between countries. It might allow it to target tax added to the British value, currently imposed on 20%, and even non-tariff factors such as 2% tax on digital giants such as Amazon.com
. If so, the financial burden of such levies, assuming around 24% at 61 billion US exports in the UK, can exceed 14 billion pounds. Trump has also talked about imposing tariffs to the automotive and pharmaceutical sectors, which contributed a quarter of British exports to the US in 2024.
One of the options for Starmer is trading British market access for American companies with tariff assistance. This helps that exports and imports between the two countries are closely matched, the US exports 58 billion pounds to England in 2023, according to the National Statistics Data Office. But in his current mood, Trump may demand the British align its agricultural standards or open its domestic health services to US medical providers. That, and bowing back to digital giant such as a meta platform
Meta, might make an angry British voters.
Neutrality can also create tension with Brussels. If Britain faces fewer tariffs than the EU, British exporters might steal a business from Europe. For example, Michael Gasiorek’s record at the University of Sussex, Northern Ireland or Scottish whiskey can be relatively cheaper if it escaped from the threatened 200% Trump tariffs that are threatened by the EU spirit. And any American agreement might drag Britain from its harmony with the EU -Metric standards that are closely monitored since Brexit.
If Britain must choose between parallel to America or Europe, it must and may choose the last one. British exports to the EU are more than three times greater than the America. Moreover, US aggression may not last long. Trump’s steps, which include taxes are not only goods but input into it, may proved out of control and make him weaken in the medium-term selection. On that basis, the fewest Starmer policy is waiting, and only reveals European preferences if he has to do it.
The British government has not responded to US tariffs on steel imports, in contrast to the European Union.
Britain maintains “all options on the table”, in response to the US decision to charge an additional 25% cost on imports of steel products and related to steel, business and trade secretary Jonathan Reynolds said in a statement.
“We focus on the pragmatic approach and quickly negotiate a broader economic agreement with the US to eliminate additional tariffs and to benefit our British and economy business,” Reynolds said in a statement.
The European Union on March 12 outlines a series of reply actions against steel tariffs, including the levies of US agricultural goods, which will be in effect starting April 1.
Source: Reuters
