Unlock the White House Watch newsletter for free
Your guide to what the 2024 US election means for Washington and the world
Britain is drawing up contingency plans for possible retaliation if Donald Trump decides to target its exports with tariffs, even as the US president suggested he might spare the UK.
Trump told reporters: “The UK is way out of line, and we’ll see. But the European Union is really out of line.”
He added: “UK is out of line but I’m sure that one, I think that one can be worked out. But the European Union, it’s an atrocity what they’ve done.”
Sir Keir Starmer’s government has done scenario planning for possible retaliation in the event of Trump targeting UK exports, according to officials briefed on the contingency plans.
“We are prepared,” said one UK official. “We are looking forward to working closely with President Trump but ministers will always do what is best in the national interest.”
The comments came even as the risk of an immediate global trade war began to recede on Monday afternoon when Mexico’s president Claudia Sheinbaum said she and Trump had agreed to postpone US tariffs for a month. Trump had also targeted Canada and China with heavy tariffs.
“The direction taken by the US this weekend has confounded most analysts,” said another British official. “Being an open economy is Britain’s big selling point but there is a very high degree of uncertainty. You can’t rule anything out.”
Speaking at Nato headquarters in Brussels on Monday, Starmer said of the prospect of US tariffs on Britain: “It’s early days. It’s really important we have a strong trading relationship.”
Downing Street on Monday left open the possibility of tit-for-tat retaliation if Britain is targeted by Trump but refused to discuss “hypothetical situations”.
“We want to build on the existing UK-US trade relationship,” a Downing Street spokesperson said. “The prime minister has built a very constructive relationship with President Trump.”
For his part Trump said: “Prime Minister Starmer has been very nice. We’ve had a couple of meetings, we’ve had numerous phone calls, we’re getting along very well.”
Downing Street said that Britain and the US had “a fair and balanced trading relationship which benefits both sides of the Atlantic”, but ministers fear that this may not be enough to protect the UK from tariffs.
The UK Treasury wants to keep any retaliation to a minimum and Jonathan Reynolds, business secretary, told the Financial Times last year: “Increasing costs of goods or food for your constituents is not attractive.”
Sam Lowe, trade specialist at Flint Global, said the problem with retaliation was that “it’s actually quite hard to inflict economic pain on the US and it would inevitably be seen as quite provocative”.
However, he said that the UK had “a long list of tariffs on the shelf” from a previous trade dispute with the US — over aluminium and steel — that it could dust down if ministers decided to retaliate.
They included tariffs aimed at specific industries in “red states” that form Trump’s political heartland: previous targets have included Levi’s jeans and Harley-Davidson motorcycles.
Lowe believes that ministers are more likely to try to avert US tariffs in the first place and says they have studied the way Japan dealt with Trump in his first term: “Basically keep your head down and don’t provoke him.”
He said that the UK could offer to buy more US products — such as gas or defence equipment — or take a tougher stance with China, a policy that Starmer is anxious to avoid. “The other thing is just to be really nice to Trump,” Lowe added. “Roll out the King.”
Duncan Edwards, chief executive of the BritishAmerican Business trade body, said: “My view is that the UK should not retaliate but politically it may be almost impossible not to.”
David Henig, a former government trade official, said one traditional EU target in any transatlantic trade dispute was Bourbon whiskey, but that Scotch whisky manufacturers would want to avoid reprisals that affected a key export market.
Sir Ed Davey, Liberal Democrat leader, said Starmer should convene a summit of Commonwealth leaders to show support for Canada, which along with Mexico has borne the brunt of Trump’s tariffs so far.
On Monday Starmer was in Brussels for talks with EU leaders, aware that his attempt to “reset” post-Brexit relations with the bloc risks antagonising Trump.
Starmer wants improved trade relations with the EU and is also seeking to deepen trade co-operation with the US, particularly in the field of services and technology.
According to US figures, America ran an overall trade surplus with the UK in 2023, amounting to $14.5bn. That puts Britain in a favourable position as Trump threatens countries with significant deficits.