Sir Keir Starmer has said “all options are on the table” as Britain plans its response to Donald Trump imposing global tariffs on steel and aluminium.
While the European Union has already announced it will introduce counter-measures on American goods, the UK has resisted imposing immediate retaliatory action against the move.
But while the prime minister suggested Britain wants to seek a carve-out from the tariffs without engaging in a tit-for-tat trade war with the US, Sir Keir indicated retaliatory tariffs are being considered.
The prospect of the UK needing to impose its own tariffs was raised after The Independent was told by Trump administration insiders that hopes for a rapid trade deal will depend on Sir Keir agreeing to cancel plans for online safety legislation – likely to be a compromise too far for the prime minister.
At Prime Minister’s Questions, Sir Keir said: “I’m disappointed to see global tariffs in relation to steel and aluminium. We will take a pragmatic approach.”
The UK is “negotiating an economic deal which covers and will include tariffs if we succeed,” he told MPs. “But we will keep all options on the table.”
It came after business secretary Jonathan Reynolds warned Britain “won’t hesitate to respond in the national interest” to the trade penalties.
The tariffs, which came into effect overnight, raise a flat duty on steel and aluminium entering America to 25 per cent.
The UK being subjected to a round of global tariffs by Mr Trump is a blow to Sir Keir and his new ambassador to the US, Peter Mandelson.
At the press conference after their meeting in the White House last month, the US president praised the prime minister for “negotiating hard” on avoiding tariffs, while Lord Mandelson made preventing tariffs an early priority in his new role.
Nevertheless, Britain has been dragged into the US trade war despite claims from Brexiteers that leaving the EU would protect the UK from tariffs mainly aimed at the EU.
It leaves the UK outside the two main trading blocs of the EU and US with the potential threat of more tariffs.
According to well-placed sources within the Trump White House, the UK can get “a quick trade deal” but free speech issues raised by vice-president JD Vance with Sir Keir are likely to get in the way.
Mr Vance will be in charge of the US side of the talks and The Independent has been told he will be “prioritising” free speech amid anger over people being arrested for posting on social media and proposed online safety legislation which he sees as an assault on US tech companies.
Mr Vance is expected to demand the UK not only abandons plans for a new online law but also pushes back on current regulations as part of the talks.
Andrew Hale, a trade specialist at the influential right-wing Heritage Foundation who is close to the Trump administration, said: “The UK is now seen as a dystopian censorship state. There should be no free trade without free speech. Stop arresting people for social media posts.”
A source close to the Trump team added: “I could see a scenario where the UK does indeed get a rapid deal, but it won’t last very long if they don’t sort out the issues Vance referenced in the meeting with Starmer. The two-tier justice system clearly employed in the UK doesn’t sit well here.”
Meanwhile, Mr Trump confirmed that the US would seek to respond with more tariffs against the EU after it imposed retaliatory measures against his tariffs.
Meeting the Irish prime minister Micheal Martin in the Oval Office, Mr Trump accused Ireland of taking advantage of the US, along with the rest of the EU.
“The EU was set up in order to take advantage of the United States,” Mr Trump said.
Mr Reynolds described the move to impose global tariffs as disappointing, but said the UK is focussed on a “pragmatic approach”.
He said ministers are “rapidly negotiating a wider economic agreement with the US to eliminate additional tariffs” and “remain resolute in our support for UK industry”.
But the Liberal Democrats said Britain is being “repeatedly kicked by the other side and doing nothing”. “That is not an effective negotiating position,” deputy leader Daisy Cooper said.
She said: “The business secretary needs to toughen up.
“Enough is enough. We must act from a position of strength, standing up for British steel and the UK economy through retaliatory measures.”
Brussels said counter-measures to the tariffs, which would affect around €26bn (£22bn) of EU exports, will be introduced in April “to defend European interests”.
UK officials have stressed the need for a “cool-headed approach” after last-ditch efforts to persuade Mr Trump to spare British industry from his global tariffs failed.
But there is growing pressure on the government to follow the EU’s approach and bolster the UK’s trade defences.
Gareth Stace, the director-general of trade association UK Steel, branded the Trump administration’s move “hugely disappointing”, and urged the government to take “decisive action” to protect the industry.
Meanwhile, Unite general secretary Sharon Graham called for steel to be “immediately designated as critical national infrastructure to properly protect it”.
Steelworkers union Community said Britain must match any measures taken in response to the tariffs by the European Union “at a minimum”.
The prime minister’s official spokesperson made clear to reporters after PMQs that “all options are on the table” in responding to Mr Trump’s tariffs.
But he stressed that the government is “prioritising engagement with the United States to stand up for British industry and find a resolution”, rather than seeking to retaliate with tariffs.
Asked whether one of the options being considered is withdrawing Mr Trump’s invite for a second state visit, Sir Keir’s spokesperson said that was not being considered.
He added: “We are talking about our bilateral trade relations with the United States.”
