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The UK has suspended import tariffs on 89 products and increased the loan facility for exporters to ease the strain on British businesses following the drastic imposition of US levies.
Levies on goods ranging from pasta to juices, plastics, plywood and gardening supplies will be slashed to zero for two years in a move that the UK government estimates will save British businesses at least £17mn a year in total.
The chancellor Rachel Reeves announced a £20bn increase in government-backed financing capacity on Sunday to help companies contend with the global trade war.
UK Prime Minister Sir Keir Starmer hopes the lower cost for producers will trickle down to consumers.
“From food to furniture, this will reduce the cost of everyday items for businesses, with savings hopefully passed on to consumers,” said business secretary Jonathan Reynolds.
The government said it would extend financing support available to British exporters via UK Export Finance (UKEF), the government’s credit agency for exporters, by £20bn to £80bn. Small businesses will also be able to access up to £2mn through the loan facility.
The move comes after US President Donald Trump imposed 10 per cent blanket tariffs on all goods exported by countries into the US.
Trump had initially announced much higher levies for many countries but rowed back on the move after a sustained market backlash that caused global stocks to plummet.
He has separately imposed a 25 per cent tariff on all steel, aluminium and car imports to the US.
British officials are increasingly uncertain that they will be able to negotiate a trade deal with the US that would exempt the UK from the tariff regime.
Reynolds said he could not “give a timeline” for when the public could expect trade negotiations between the UK and the US to conclude. But, he told Sky News, he was “never going to be satisfied while there are barriers to trade between ourselves and the US”.
Reeves affirmed over the weekend the Labour government’s support for free trade and said she was under no illusion about the “profound” difficulties that lie ahead following the US’s shift in trade policy.
“The Labour party is an internationalist party. We understand the benefits of free and fair trade and collaboration. Now is not the time to turn our backs on the world,” she wrote in the Observer.
Reeves stressed that the UK was attempting to craft an ambitious new relationship with the EU as well as a trade deal with India.
The government is also seeking bilateral trade deals with the Gulf Cooperation Council, Switzerland and South Korea.
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