Tariffs live: Starmer admits UK will face Trump tariffs this week amid global recession fears – UK Times

Donald Trump’s decision to impose a 25 per cent tariff on UK steel has sparked concerns about the future of Britain’s struggling steel industry.

However, Oliver Chapman, Group CEO of OCI, believes the impact may not be as severe as feared—and could even bring unexpected benefits.

“I don’t believe that these tariffs will have as much of an impact on the UK economy as people think,” Mr Chapman said.

He pointed out that the UK is a net importer of steel, buying $7.3 billion worth worldwide while exporting $5.4 billion. Only 9 per cent of UK steel exports go to the US, with 70 per cent heading to Europe.

The tariffs mainly target high-grade steel used in military, construction, and automotive industries. Mr Chapman suggested that Trump could be using the move as a strategic play.

“These tariffs are only on £370 million worth of imports and therefore won’t hit the UK hard. Trump may be signalling that if the UK backs the US on this, it will receive support in return.”

He also argued that the shift could strengthen UK-EU trade. “Because of Brexit, this could indirectly benefit the UK by increasing steel exports to Europe instead of the US.”

While some fear higher steel prices, Mr Chapman dismissed those concerns. “Why would prices go up? The UK will simply export more steel to Europe. If anything, prices could stay the same or even fall.”

China, Japan and South Korea agreed to jointly respond to US tariffs, a social media account affiliated with Chinese state broadcaster CCTV said this morning, an assertion that Seoul called “somewhat exaggerated”.

The state media comments came after the three countries held their first economic dialogue in five years on Sunday, seeking to facilitate regional trade as the Asian export powers brace against US president Donald Trump’s tariffs.

Japan and South Korea are seeking to import semiconductor raw materials from China, and China is also interested in purchasing chip products from Japan and South Korea, the account, Yuyuan Tantian, said in a post on Weibo.

All three sides agreed to strengthen supply chain cooperation and engage in more dialogue on export controls, the post said.

When asked about the report, a spokesperson for South Korea’s trade ministry said “the suggestion that there was a joint response to US tariffs appears to have been somewhat exaggerated,” and referred to the text of the countries’ joint statement.

During Sunday’s meeting, the countries’ trade ministers agreed to speed up talks on a South Korea-Japan-China free trade agreement deal to promote “regional and global trade”, according to a statement released after the meeting.

“The three countries exchanged views on the global trade environment, and as you can see in the joint statement, they shared their understanding of the need to continue economic and trade cooperation,” the South Korean trade ministry spokesperson said.

Tariffs are taxes paid by US companies on imported goods.

They are seen by Donald Trump as a way to bolster production by American firms, protecting home-grown manufacturers, while also punishing foreign countries for unfair trade practices.

Sir Keir Starmer is facing an “impossible task” in deciding whether to retaliate to Trump’s looming tariffs, an expert has warned.

Simon Finkelstein, director of geopolitics at the Brunswick Group said “It would be foolish to do so, however, politically it might become untenable not to do so.”

“Fundamentally he’s got an impossible task because the people who work for the President clearly don’t know what he’s going to do on Wednesday either,” he told Times Radio.

“But I think the thing [Starmer] has got to do is continue on the same strategy, which is attempt to negotiate some sort of future deal with the US, whether that looks like something sort of wider range or more limited on technology to mitigate the worst aspects of the tariffs.”

“The UK government has to at least try,” Mr Finkelstein added.

Many economists believe that trade tensions sparked by Mr Trump will slow economic growth around the world.

The Organisation for Economic Co-operation and Development (OECD) said earlier this month that US trade policy would be a “drag on global activity” and hit living standards around the world.

“Overall, consumers face much of the burden of higher tariffs,” the OECD said in its economic outlook report, with real disposable incomes estimated to decline by 1,600 US dollars (£1,237) per household in the US.

In terms of the UK impact, experts say there is a great amount of uncertainty about how tariffs will filter through to households and businesses, especially if the country avoids steep penalties.

Economists at the Bank of England said the effect on inflation in the UK would depend on how other countries respond with their own trade policies, and how foreign exchange rates are affected.

Economist Swati Dhingra, a member of the Bank’s Monetary Policy Committee, has said the UK is sensitive to changing import prices.

But she suggested that the inflation impact could be “less than feared” because the main goods that the US imports from the UK, including refined oil, were unlikely to see cost increases on account of tariffs.

The Bank, which sets UK interest rates, said it was a “rapidly evolving situation” that it was monitoring closely.

Read The Independent’s editorial below:

Our political editor David Maddox and politics correspondent Archie Mitchell report on today’s events:

Some business groups have warned Sir Keir Starmer against follow the EU in unleashing retaliatory measures.

John Longworth, chairman of the Independent Business Network (IBN), warned that UK tariffs on the US would be “an act of self harm”.

He said: “Tariffs are primarily self harm unless they attack strategic industries. Our goods trade with the US is broadly in balance. We should seek trade arrangements asap and ignore the naysayers. It will cut inflation, help consumers and UK business.

“We should avoid the EU tariff war and stop protecting expensive EU producers. If we get involved in a tariff war it will cut economic growth even further and add to inflation = stagflation.”

Meanwhile, Marco Forgione, director general at the Chartered Institute of Export and International Trade, has suggested that it will result in major western democracies turning their backs on the US and working more closely together.

He told The Independent: “There is going to be a geo-political shift with Canada, EU, UK and Australia forming a closer trading partnership.

“That means the development of either a formal or informal collaboration. It won’t replace the US market but certainly regarding commodities could establish a new collaborative trading community.”

Reform UK leader Nigel Farage, who is a prominent supporter of the US president, said that tariffs “won’t be popular with anybody, not me either” but that retaliation would be “an act of self-harm”.

“What disappoints me more than anything is we had a massive opportunity in Trump’s first term to do a free trade deal with America,” he said.

“We didn’t do it because the Conservatives didn’t deliver Brexit, we weren’t free to do it, but we did negotiate nearly three quarters of the chapters that we needed to get to that position… But I do think we can sort this out.”