Donald Trump considering making British exports exempt from tariffs

A carve-out for the UK on the new levies would represent a major win for Sir Keir Starmer’s government

Donald Trump is considering offering the UK a special deal that would exempt British exports from billions of pounds of new tariffs.
The US president has pledged to impose huge levies on all foreign imports after he takes office next year, under an “America First” trade policy that has caused panic in European capitals.
But sources close to Mr Trump said the UK could be exempt from the tariffs, under the terms of a deal that Britain hopes to negotiate in the coming months.
The president-elect’s proposed tariffs include a levy of between ten and 20 per cent on all foreign imports, and a 60 per cent duty on goods and services from China.
After Mr Trump’s victory in Tuesday’s election, foreign governments including the UK, are preparing for the return of protectionist trade policy by the world’s largest economy.
British ministers and diplomats are planning to play up the UK’s “special relationship” with America to Mr Trump in a bid to remove Britain from the plans.
Mr Trump, a supporter of Brexit, was fiercely critical of Theresa May’s proposed deal to leave the EU but often lavished praise on Boris Johnson as he forged a different Brexit path when he became prime minister.
A UK government source told The Telegraph that Britain will prioritise exports to the US from its service industry, valued at £130 billion last year, in any talks.
Experts estimate the tariffs would raise between $2 trillion and $3.3 trillion for the US Treasury, but would have a major impact on growth in both America and around the world. The UK economy could shrink by up to 0.7 per cent if the tariffs were imposed in full.
Any deal on tariff exemptions would likely involve concessions by the UK on other policy issues, which could include Mr Lammy’s plan to align Britain more closely with the EU.
Mr Trump is also likely to reject requests to remove tariffs on goods that are critical to US domestic manufacturing, including cars, a UK government source said.
Rachel Reeves, the Chancellor, said on Wednesday that the UK would make “strong representations about the importance of free and open trade” to his team while David Lammy, the Foreign Secretary, told the BBC on Thursday that he would “ensure that as a major ally we were aligned and we were considered”.
Mr Trump, whose mother was Scottish, has long been fond of the UK and held talks for a full free trade agreement during his first administration, but the talks collapsed over disagreements about agrifoods, including the import of chlorine-washed chicken to the UK.
An attempt to revive the talks under Joe Biden’s administration stalled, and UK officials said the chance of striking a new deal, which would require Congressional approval, is now remote.
On Friday it was reported that Mr Trump has appointed Robert Lighthizer, his former trade representative during the talks, to the same position in his second administration.
Lionel Barber, a former editor of the Financial Times, said those in Mr Trump’s inner circle believe he is frustrated that successive British governments have not “made anything” of leaving the EU since 2016.
A carve-out for the UK on the new tariffs would represent a major win for Sir Keir Starmer’s government, which has been accused of upending the “special relationship” after historic comments from Cabinet ministers about Mr Trump emerged this week.
Mr Lammy, who previously called Mr Trump a “neo-Nazi sympathising sociopath”, has since befriended members of the president-elect’s team, including JD Vance, his running mate.
Speaking to The Telegraph’s Daily T podcast, Mr Trump’s former national security adviser John Bolton said Sir Keir should use his election victory to resurrect talks for a full free trade agreement.
He said: “This is a huge opportunity. If [Sir Keir] could explain why a bilateral trade deal between the UK and the US would enhance Donald Trump’s reputation, that would be a way to go.”