Trade Secretary Jonathan Reynolds insists the UK is well-positioned to negotiate relief despite ongoing uncertainty
The UK is bracing for a fresh wave of US trade tariffs, with President Donald Trump expected to announce new import taxes on Wednesday. However, Trade Secretary Jonathan Reynolds remains optimistic, insisting that Britain is in the “best possible position” to negotiate an exemption.
Despite repeated talks between UK and US officials, no breakthrough has been reached. Reynolds acknowledged the imminent impact of the tariffs but assured that discussions with the Trump administration have been “constructive” and could lead to a reversal.
Tariffs Could Disrupt UK Economy
Economic analysts warn that these tariffs could significantly hinder the UK’s growth, potentially derailing the government’s borrowing targets. The Office for Budget Responsibility (OBR) has estimated that a trade war could shrink the UK economy by up to 1% in the worst-case scenario.
Chancellor Rachel Reeves has floated the idea of revising the UK’s digital services tax—currently a 2% levy on major US tech firms like Amazon—as a bargaining tool to secure tariff relief. However, the government has yet to confirm any concrete policy changes.
UK Industry Leaders Express Concern
Several key UK industries, including pharmaceuticals and Scotch whisky, are on high alert. The pharmaceutical sector, which exported £6.6 billion in goods to the US in 2024, fears major setbacks.
Steve Bates, CEO of the BioIndustry Association, highlighted the potential disruption:
“Half of the world’s market in pharmaceuticals is in the US, and for the UK, exports of pharmaceuticals are about the same size as the car industry.”
The Scotch whisky industry is also anxious, having previously been targeted by Trump’s trade policies. With exports to the US reaching £971 million last year, any significant tariff hike could severely impact investment and pricing.
Will the UK Retaliate?
While some nations are preparing counter-tariffs, the UK government has remained cautious, opting for diplomacy over retaliation. Conservative leader Kemi Badenoch warned that a “tit-for-tat” approach could worsen the situation, ultimately raising costs for British consumers.
Government sources suggest that negotiations have made progress, but Trump’s unpredictable statements have created uncertainty. A senior UK official stated:
“We are pretty much there on an agreement. What we have no clarity on is when the president might sign it off or what he will do next.”
The Path Forward
As the UK navigates this trade dispute, Reynolds remains hopeful that a resolution is within reach. His team continues to push for a long-term trade deal that addresses tariffs, technology, and agricultural trade.
With industries on edge and economic stability at stake, all eyes are now on the Trump administration’s next move—and whether the UK’s diplomatic efforts will pay off.
