The Government has pledged an extra £20bn in support for UK firms set to be hit by US President Donald Trump’s export tariffs.
UK firms were set to be hit by a universal 10% baseline tariff, with many other countries facing steeper taxes. China’s decision to impose tit-for-tat duties has seen the Trump administration decide on an astonishing 145% levy for Chinese goods entering the US.
Last week Trump announced a 90-day pause on tariffs after global financial markets were left reeling from the see-sawing policy announcements.
However the Treasury has moved to expand the UK’s export finance support package by £20bn to a total of £80bn, which Chancellor Rachel Reeves said would benefit “thousands of UK businesses affected by tariffs”.
Up to £10bn of that support will be used specifically for firms impacted in the short term by the current situation, the Treasury said.
“The world is changing, which is why it is more important than ever to back our world-leading businesses and support them to navigate the challenges ahead,” said Reeves.
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Small businesses will also be able to access loans of up to £2m as part of the package.
The latest U-turn from Trump over the weekend saw electronics exempted from tariffs to give US technology companies more time to move production to the US.
Smartphones, laptops, hard drives and machines that make semiconductors – including those from China – will not be taxed in a move that could prevent the cost of gadgets such as iPhones from spiralling.
In a column for the Observer newspaper, Reeves advocated for “a more balanced global economic and trading system that supports national economies to become more resilient… one that recognises the benefits of free and fair trade but also seeks to address the challenges of this new era”.
She added: “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 but to face forward.”