Britain is likely to line up alongside the EU against the US if Donald Trump triggers a new trade war, a senior minister has signalled.
Business Secretary Jonathan Reynolds told peers that the UK would need to ‘weigh the consequences’ of any demands the incoming US president makes on trade if they risk damaging relations with the EU.
Britain has a larger trading relationship with the bloc than America and would be cautious of provisos that may have an ‘adverse’ effect on ties with Brussels, he told peers last night.
He also warned that the UK would be left ‘much more exposed’ than the US if there were a trade confrontation between Beijing and the West, indicating Britain would be unlikely to copy Washington’s stance in such a scenario.
Concerns have mounted over a potential hit to the UK economy following President-elect Donald Trump’s repeated promise during his election campaign to levy a 20 per cent tax on all imports.
He has also threatened to bring in tariffs as high as 60 per cent on Chinese-made goods and appointed prominent China hawks to foreign and defence positions.
Mr Reynolds told the House of Lords’ International Agreements Committee that US tariffs on imports from the UK ‘would be a difficult thing for us to have to contend with’.
He added: ‘The US is a major and important trading partner for the UK, £300 billion of bilateral trade, but compared to the EU with over £800 billion of bilateral trade.
‘Clearly if there are things that we’re offered or asked to do that would result in an adverse relationship on the European side, we’d have to weigh the consequences of that.’
Mr Reynolds said that as a ‘globally-oriented’ trading nation, Britain would be particularly affected by a trade war with Beijing.
‘I think perhaps the most important thing to say is that there have been many parts of the US presidential campaign, actually much more on a kind of cross-party basis in the US, that relate to how the western world as a whole should consider its relationship to China,’ the Cabinet minister said.
‘And I think again, we’ve just got to be clear with the British people that if there were to be a much wider trade confrontation with China and the West, as a much more globally-oriented trading nation the UK is much more exposed to that than, say, the US is.
‘So simply being asked to replicate what another country is proposing might be a much more painful proposition for the UK than it might first appear to people not aware of just how trade intensity affects our economy.’
It comes as Prime Minister Sir Keir Starmer on Monday told Chinese President Xi Jinping he wanted ‘respectful’ relations with Beijing as he became the first prime minister to meet the leader since 2018.
The PM discussed ‘deepening’ Britain’s links with China despite the communist country’s support for Russia and domestic human rights abuses.
Sir Keir became the first British premier to meet Chinese President Xi Jinping since 2018, as they held talks at the G20 in Rio.
The UK’s relationship with Beijing has been in the deep freeze following China’s crackdown on democracy protests in Hong Kong.
China has also been widely condemned for its brutal treatment of the Uyghur population in Xinjiang, which Labour once labelled a ‘genocide’.
Speaking after his talks with Mr Xi, Sir Keir said he wants a ‘serious and pragmatic’ relationship with China while ‘being clear about the issues that we do not agree on’.
‘It’s the second biggest economy in the world, it’s one of our biggest trading partners, and therefore we have issues that we clearly need to discuss,’ the PM told broadcasters.
‘Whilst, of course, being clear about the issues that we do not agree on. But I will always act in the national interest, and that was the basis upon which we had our discussions this morning.’
No10 also confirmed Chancellor Rachel Reeves will visit Beijing next year for talks with her counterpart, vice premier He Lifeng.
Foreign Secretary David Lammy visited China earlier this year.