David Lammy says Labour is ready to take on Donald Trump on trade as Bank of England boss Bailey warns new president’s protectionism may trigger ‘fracturing of the world economy’_Nhy
Labour is prepared to clash with Donald Trump if the new president introduces punitive tariffs on US imports in a bid to hurt China, David Lammy signalled last night.
The Foreign Secretary said that the UK government would warn that ‘hurting your closest allies cannot be in your medium or long term interests’ if he goes ahead with pledges to hinder free trade.
Trump has proposed a 10 per cent tariff on all US imports and a 60 per cent levy on Chinese-made products, which if enacted would affect the entire economy by pushing consumer prices higher and stoking retaliatory levies on American exports.
He claims the move will protect American jobs, boost the economy and raise revenue.
Asked about the proposed levies on the BBC‘s Newscast podcast, Mr Lammy cited previous UK criticism of Biden economic plans, adding: ‘Of course, we would seek with a new administration to ensure that as a major ally we were aligned and we were considered that would obviously. That’s in the Britain’s national interest. Of course we do that.’
Asked if that means we would seek to get tariffs cut, he added: ‘We will seek to ensure and to get across to the United States – and I believe that they would understand this – that hurting your closest allies cannot be in your medium or long term interests, whatever the pursuit of public policy in relation to some of the problems posed by China.’
It came as Bank of England Governor Andrew Bailey warned that tariffs could ‘fracture’ global trade.
The Foreign Secretary said that the UK government would warn that ‘hurting your closest allies cannot be in your medium or long term interests’ if he goes ahead with pledges to hinder free trade.
Trump has proposed a 10 per cent tariff on all US imports and a 60 per cent levy on Chinese-made products, which if enacted would affect the entire economy by pushing consumer prices higher and stoking retaliatory levies on American exports.
It came as Bank of England Governor Andrew Bailey warned that tariffs could ‘fracture’ global trade.
He told LBC: ‘What I would call fragmentation of the world economy, the world economy sort of breaking up is not a good thing, it’s a bad thing.
‘Open trade really stimulates growth. Adam Smith taught us this, open trade is good for growth.
‘Now, there are risks attached to it, and we have seen those risks, so there are obviously risks.
‘We saw it with the impact of the Ukraine War, that if you’re overly dependent on one part of the world for something, obviously, if it gets disrupted, that can have a bad effect.
‘So, diversification, spreading your sources of things, and trade is sensible and good. But if the world becomes more closed the cost of trade goes up – protectionism, that’s not a good thing.’
During his 2017-2021 presidency, Trump imposed waves of tariffs on products like steel, washing machines, solar panels and consumer goods from China.
He also slapped a 25 per cent tariff on imports of Single Malt Scotch Whisky as part of a wide-ranging trade war with Europe over aerospace subsidies.
The 18-month price hike cost the Scottish Whisky industry around £600 million in exports.
The tariff was suspended for five years in 2021 but is due to return in June 2026.
The Scottish Whisky Association, whose members support 25,000 jobs and generated around £7 billion for the UK economy, said ‘zero-tariff trade’ must continue.
Yesterday ratings agency S&P Global said the pledge to impose a universal 10 per cent tariff on imports and 60 per cent on Chinese goods is likely only a starting point for negotiations.
Tariffs are unlikely to be imposed at those levels, but were Trump to follow though, the universal 10 per cent tariff could add as much as 1.8 percentage points to US inflation, the report said yesterday.
It added that this would trigger a resurgence in inflation in the first year rather than having an ongoing inflationary effect, and hit output by as much as 1 percentage point.
