UK Government announces extra help for businesses hit by US tariffs

Businesses hit by Donald Trump’s tariffs are set to receive extra support as the Government announced a new export finance package worth billions of pounds.

Chancellor Rachel Reeves said thousands of businesses would benefit from the move, which will expand UK Export Finance (UKEF)’s support for firms by £20 billion.

Up to £10 billion of that support will be used specifically for firms “impacted in the short term by the current situation”, according to the Treasury.

Growth

Ms Reeves said: “The world is changing, which is why it is more important than ever to back our world-leading businesses and support them to navigate the challenges ahead.

“Today’s announcement will do that just, with thousands of businesses right across the country set to benefit.

“We are going further and faster to boost growth, but we cannot do it alone. Only by working with businesses will we achieve our Plan for Change and put more money into people’s pockets.”

UKEF will be given greater flexibility to provide businesses with partial loan guarantees, while the British Business Bank will expand its own loan guarantee scheme for small businesses by £500 million.

The move comes after Donald Trump imposed sweeping tariffs on imports to the United States, rocking the world economy, sending stock prices tumbling and sparking fears of a global recession.

Rowed back

Since then, Mr Trump has rowed back on tariffs, reducing the rate paid on imports from most countries to 10% and, on Saturday, exempting electronics such as smartphones and laptops from the levy – including the 145% charge on imports from China.

The Government remains hopeful of a deal to exempt the UK from Mr Trump’s tariffs, with Ms Reeves saying she was “resolved” to get “the best deal possible” for the UK.

But during the week, a senior Trump adviser suggested this was unlikely, saying the 10% tariff was now a “baseline” and anything below that would be “extraordinary”.

Ms Reeves will aim to continue negotiations for an economic deal with the US later this month when she travels to Washington to attend the International Monetary Fund’s spring meetings with other finance ministers.

Balanced

Meanwhile, in a column for the Observer newspaper, Ms Reeves said she would also argue for “a more balanced global economic and trading system that supports national economies to become more resilient.

“One that recognises the benefits of free and fair trade but also seeks to address the challenges of this new era.”

Although she stopped short of directly criticising Mr Trump in her column, the Chancellor acknowledged that his tariffs would have a “profound impact” on both the UK and global economies.

She added: “The Labour party is an internationalist party. We understand the benefits of free and fair trade and collaboration. Now is not the time to turn our backs on the world but to face forward.”

Conservative shadow business secretary Andrew Griffith said: “Labour dithered and delayed on securing an exemption from tariffs, and binned the Government’s chief negotiator.

“Now, British manufacturers are paying the price, facing higher costs, disrupted supply chains and uncertainty made worse by the Government’s decision to introduce a jobs tax, and more business regulation.

“Under the Conservatives, we laid the groundwork for a US deal with eight state-level agreements and serious progress on a trade deal.”