By The Telegraph (World News) | Created at 2024-11-18 07:35:10 | Updated at 2024-11-18 09:38:59
2 hours ago
Donald Trump’s plans to impose tariffs on goods entering the US will deal a £20bn blow to Britain’s economy, economists have warned.
The President-elect’s plans to impose levies of 60pc on Chinese products sold to American businesses, as well as 20pc tariffs on all other imports “pose challenges” for the Government, according to the Centre for Economics and Business Research (CEBR).
It said such a plan, without retaliation, could reduce UK gross domestic product (GDP) by 0.9pc by the end of the Trump administration. That is equivalent to about a £20bn blow at the end of his term, based on 2023 figures on the size of the British economy.
Meanwhile, estimates from the National Institute of Economic and Social Research (NIESR) suggest that 10pc tariffs could cut UK economic growth by 0.7 percentage points.
The CEBR said the clearest way to avoid the blow would be to agree a free-trade deal with the US, but it acknowledged that issues over food standards were unlikely to make this possible.
Instead, it urged ministers to “bolster [the UK’s] position as a leader in green technology” to counteract Trump’s likely rollback of Joe Biden’s flagship Inflation Reduction Act (IRA).
Economist Sara Pineros said: “The Chancellor faces a pivotal period to act on her pro-growth agenda and position the UK as a competitive destination for investment.
Ultimately, while US tariffs and rising protectionism pose challenges, other proposals under a new Trump administration also present opportunities for the UK to adapt and thrive.
“Without strengthening its approach, the UK risks taking all the pain associated with a Trump presidency without realising the potential gain.”
Read the latest updates below.
