After the first Trump administration slapped steel and aluminum tariffs on the EU in 2018, when Britain was still a member, Brussels retaliated with tariffs on everything from Harley Davidson motorcycles to Levi jeans and bourbon.
But firms on both sides of the Atlantic fear retaliation, said Duncan Edwards, CEO of the transatlantic business group BritishAmerican Business. “Even if one side imposes [tariffs], in my view, the other side should not,” he said. Retaliation would punish British consumers “by making things more expensive than they otherwise would be.”
Nevertheless, Trump’s moves would “be immediately felt by U.K. exporters,” said Aline Doussin, partner at the law firm Hogan Lovells and head of its international trade team in London. “The U.K. government, in coordination with stakeholders here in the U.K, should prepare for all scenarios possible.”
At the moment there is “no firm plan” that companies and the public have heard from the government about how it would respond, Doussin said. But retaliation from the U.K. could make things worse, she added.
“We have seen some trade escalation in the context of the previous [Trump] administration,” she added, warning that “the market agrees that mostly everybody loses in escalating tariff increases.”
