Sir Keir Starmer is scrambling to finalise a package of economic concessions to the US in a bid to persuade Donald Trump to spare Britain from his trade war. The US President is set to unveil sweeping global levies today in a move he has dubbed “liberation day”.
The Government had been rushing to agree an economic deal with Washington before Mr Trump’s announcement. But Sir Keir now accepts the pact will not happen in time and is turning his attention to show the US President that the UK is willing to give ground.
UK negotiators are reported to be pursuing an agreement with the US focused on technology.
Such a deal is said to include possible changes to the digital services tax – which imposes a 2% levy on the revenues of several major US tech companies – in exchange for a carve-out from the tariffs.
It is unclear what Mr Trump will announce later, but his administration views the application of VAT rate as discriminating against US goods and could respond with a 20% tariff on imports from the UK.
He has already confirmed a 25% import tax will be introduced on all cars imported to the US, a measure which will be a blow to the UK’s automotive industry.
Tariffs on steel and aluminium imports, including from British firms, are already in place.
Economists at the Office for Budget Responsibility have warned that US tariffs could derail Labour’s economic plans.
Before Mr Trump’s announcement, Sir Keir will face MPs at Prime Minister’s Questions while the Commons Treasury Committee will grill Chancellor Rachel Reeves on last week’s spring statement, but is sure to face questions about what the tariffs will mean for her plans.
