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Britain will certainly be hit by Donald Trump’s trading tariff Downing Street said as the hope of concluding an agreement before Wednesday’s deadline disappears.
Sir Keir Starmer hoped to achieve an exemption for British businesses, but despite ‘Intense Negotiations’ with Washington DC No 10, it confirmed that no agreement would be in place before April 2 when the US president promised to impose charges on a wide range of goods.
This comes as a big blow to Sir Keir after careful diplomatic efforts to Mr. Trump to strive, including an invitation to a second state visit. And the admission came despite a warm telephone conversation between the president and Prime Minister Sunday night.
Meanwhile, two major business groups have warned that more than 60 percent of their members will be hit directly by US rates, with others having indirect consequences of the impact on supply chains.
International markets tumbled around the world on Monday when President Trump confirmed on Wednesday that rates ‘will hit all countries’ in what he called ‘Liberation Day’.
Mr. Trump has confirmed the rates on steel, cars and aluminum products, but the announcement on Wednesday is expected to include more measures.
And in a sign of the damage caused by rates, the British Chamber of Commerce (BCC) estimated that nearly two-thirds (63 percent) entered businesses that represented it would be hit by the new tariff war.
Meanwhile, the Federation of Klein Enterprises (FSB) said that 60 percent of its members are exporting to the US.
William Bain, head of trade policy at the BCC, pointed out that the Office for Budget Responsibility (OBR) warned last week that a trade war with the US would eradicate all the chancellor of Rachel Reev Reeves who gave herself in the spring statement, which would leave the government vulnerable to major opportunities.
Mr Bain said: “Rates mean that prices and costs will inevitably rise and it is a loss-lost scenario for consumers, businesses and economic growth. But the imposition of more rates by the US does not mean that we have reached the end of the road in respect of negotiations. Rates can be lifted at any time.”
FSB policy chair Tina McKenzie said: ‘There is no question of the fact that rates will be a major headache for small businesses.
“Extra costs are the last thing businesses need, especially at a time when nine out of ten small and medium -sized companies (SMEs) believe that exports are important for the total economy. With 59 percent of small exporters currently exporting to the US, any disruption of trade can have a large ripple effect.”
Meanwhile, the BCC and others are requesting the British government to continue its talks on a trade agreement with the US in an effort to turn the rates.
But there were warnings of other business groups would follow Sir Keir the EU in the retaliation of retaliation.
John Longworth, chairman of the Independent Business Network (IBN), warned that the UK rates on the US would be “an act of self -harm”.
He said: “Tariffs are mainly self-harm, unless they attack strategic industries. Our goods dealing with the US are broadly in balance. We need to look for ASAP trading arrangements as soon as possible and ignore the naysayers. It will reduce inflation, help consumers and UK affairs.
“We need to avoid the EU tariff war and stop protecting expensive EU producers. If we get involved in a tariff war, it will further reduce economic growth and contribute in inflation, equal to stagflation.”
But trade experts said that the events of Wednesday will in fact see a major shift in geo politics that will regain global alliances.
One of Britain’s leading trade experts is of the opinion that if Donald Trump continues with his round of rates on Wednesday, April 2, it will lead a major geo-political shift.
Marco Forgione, director of the Chartered Institute of Export and International Trade, has suggested that this will result in large Western democracies turning their backs on the US and working closely.
He told the Independent: ‘There will be a geo-political shift with Canada, the EU, the United Kingdom and Australia that form a closer trade partnership.
“This means the development of a formal or informal collaboration. It will not replace the US market, but with regard to commodities, a new collaboration community can establish.”
It was an issue picked up by the Lib Dem leader, Sir Ed Davey.
He said: “We must stand high with our allies in Canada and Europe at Trump’s rates and show that Britain will not be bullied. That means they are preparing potential rates, including on Elon Musk’s Teslas, and urgently negotiating a better trade transaction with the EU.”
The shift fits in the current membership of the UK’s current membership of the comprehensive and progressive Trans Pacific Partnership (CPTPP) that Canada and Australia are already members of as well as Japan.
But it will also help Sir Keir remedy with his Brexit composition with the EU.
Chris Southworth, Secretary General of the International Chamber of Commerce, UK (ICC UK), said: “Businesses need certainty to operate, plan, invest.
‘It is very difficult, if not impossible, to soften the impact of rates as soon as they come into effect, especially if every country gives reprisals. If the rates are in place once, it will require a tremendous amount of diplomatic effort, all of which to divert resources from where they should work together to solve the problems we all experience as a global community. “
Andrew Griffith MP of Tory Shadow Trade said: “This news is possibly a hammer that not only for British businesses and workers, but for his own chancellor whose creative accounting at the emergency budget does not include the impact of rates.”
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