JD Vance has blamed Britain’s sluggish economy on soaring levels of immigration. The US Vice President blasted the UK along with other “lazy” Western countries which he said have relied on imported “cheap labour”. He told a meeting with tech bosses in Washington DC: “I’d say that if you look at nearly every country, from Canada to the UK, that imports large amounts of cheap labour, you’ve seen productivity stagnate. That’s not a total happenstance. I think that the connection is very direct.”
Mr Vance added that US economic policy had “failed” over the last four decades because it, too, was hooked on cheap labour. He also defended US President Donald Trump’s use of tariffs, describing them as a “necessary tool” to protect jobs and industries from other countries.
It is not the first time the Vice President has targeted the UK, having criticised the country over free speech and appearing to downplay Britain’s military support for the US.
The UK has also been dragged into the Trump administration’s trade war, with Britain included in a 25% tariff on steel and aluminium imports.
Business Secretary Jonathan Reynold was expected to raise Britain’s steel industry in talks on a potential UK-US economic deal during a visit to Washington, DC. Mr Trump has said there will be no exemptions to his metal tariffs.
Unlike the European Union, which announced counter-measures on a range of US goods, the British Government has resisted taking immediate retaliatory action against the tariffs.
However, ministers have expressed disappointment at the move, saying “all options” remain on the table to respond in the national interest.
Mr Vance’s economic analysis comes amid concerns over the US economy. Consumer sentiment has fallen sharply as Americans worry inflation will rise in the coming months. Small business owners in the US have reported a much more uncertain economic outlook, which can cause them to cut back on hiring and investment.
Retailers have also warned consumers are turning more cautious as they expect prices to rise because of trade tariffs. US retail sales rose modestly last month after a sharp fall in January. Builders and contractors expect that house building and renovations will become more expensive.
The US Federal Reserve said on Tuesday (March 18) that manufacturing output jumped last month, driven higher by a spike in car production. Some of that rise could reflect higher vehicle purchases by consumers looking to avoid tariff-linked price hikes. New home construction also grew faster than expected.
Many economists have sharply reduced their forecasts for US growth this year, with Barclays now forecasting growth of just 0.7%, down from 2.5% in 2024. Economists at Goldman Sachs now expect inflation — excluding the volatile food and energy categories — will rise higher to 3% by the end of this year, up from its current level of 2.6%.
The Organisation for Economic Co-operation and Development (OECD) has trimmed its US growth forecast to 1.6% in 2026 down from the 2.1% previously pencilled in.
But the US is not alone. The UK has economic woes of its own, with the OECD predicting growth of 1.2% in 2026, down from 1.3% in its previous prediction.