Sir Keir Starmer is suspending import tariffs on dozens of goods in a move to support British companies caught in the crossfire of Donald Trump’s escalating trade war.
Duties on 89 products, ranging from electric vehicle batteries to fruit juice, will be cut to zero for two years. The intervention marks a significant step by the Government to ease the burden on firms facing mounting costs due to new US tariffs.
Among the goods benefiting from the suspension are aluminium wheels and components used in electric vehicle manufacturing. These reductions aim to cut costs for British businesses affected by Mr Trump’s renewed focus on import duties.
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Although the UK avoided the brunt of Mr Trump’s “reciprocal” duties announced on his self-declared “liberation day”, it has still been hit with 10 per cent levies on some products. A separate 25 per cent tariff on cars — Britain’s top export to the US in the first nine months of last year — has added further strain.
In response, the Prime Minister is suspending duties on a wide range of UK imports until July 2027, in what Downing Street describes as a measure to support businesses grappling with an uncertain trading environment in a “new era of global trade”.
This move forms part of a broader support package for UK firms, which also includes increased access to state-backed loans for those directly impacted by US tariffs.
Speaking last week, Sir Keir said he was willing to do “everything necessary” to protect British industry from the fallout of Mr Trump’s actions.
The Government estimates that the tariff suspensions could save businesses around £17 million per year — savings which, it hopes, could eventually be passed on to consumers. However, ministers acknowledge there is no guarantee firms will reduce prices, and the move will come at a cost to the public purse, with millions in lost revenue to the Treasury.
Products set to benefit from zero tariffs include agave syrup — a popular sweetener in baking and cocktails — pasta, canned pineapples, pine nuts, fruit juices, coconut oil, and plant bulbs. The construction sector will also see relief, with duties reduced on imported plywood and plastics.
Goods that already receive preferential treatment under existing free trade agreements will remain unaffected.
All relevant tariffs will be reduced to zero from their current rates. For instance, aluminium wheels currently face a 4 per cent duty, while components for electric vehicles attract a 2 per cent rate. Some food products, including fruit juices and coconut water, had previously faced tariffs ranging from 14 to 30 per cent, and frozen shrimp was subject to a 20 per cent duty.
Mr Trump announced late on Friday that smartphones, computers, and other electronics — which are not typically manufactured in the US — would be spared from the new 10 per cent levy on UK imports, as well as from the 125 per cent tariffs imposed on goods from China.
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In a related development, the Government has expedited elements of its forthcoming industrial strategy in response to the trade tensions. This comes after the Prime Minister softened the planned 2030 ban on new petrol and diesel vehicles to ease pressure on manufacturers, following Jaguar Land Rover’s decision to suspend exports to the US — a trade worth an estimated £6.5 billion.
Despite these measures, ministers remain concerned about the long-term fiscal impact of US tariffs, particularly if a new UK-US trade agreement is not reached. In that event, Chancellor Rachel Reeves may be forced to consider tax increases or spending cuts in the upcoming autumn Budget to stay within fiscal rules.
Ministers have suggested that the reduced tariffs could lead to lower prices for consumers as early as this summer, particularly in supermarkets, restaurants and pubs.
Chancellor Reeves stated: “In a changing world, we understand that families are anxious about the cost of living and businesses are uncertain about what lies ahead. That’s why we’ve acted to lower prices on imports of everyday essentials — helping firms to grow and pass on savings to customers.”
Business Secretary Jonathan Reynolds added: “As we enter a new phase of global trade, this Government is accelerating action to make Britain the best place to do business. These tariff suspensions are just one example of our Plan for Change in motion.”
In a further boost for exporters, UK Export Finance — the Government’s export credit agency — is being granted expanded powers, allowing it to increase support by £20 billion. Ministers say the move will benefit thousands of firms, especially those directly affected by the new US trade barriers, providing a “crucial shot in the arm” to international traders. The measures are part of a wider business support package worth an estimated £80 billion, which includes a provision for small firms to access loans of up to £2 million.
