Starmer to ease pressure on industry as tariffs bite – Daily Business

* EV rules may be diluted * Food and drink escapes worst * Northern Ireland may benefit

Sir Keir Starmer is expected to resist retaliatory tariffs on the US but will announce a range regulatory changes and accelerate other reforms to help UK industry, and prevent the economy sliding into recession.

As trillions were lost on global stock markets, the Prime Minister remained determined to seal a deal with the US rather than provoke further tensions by hiking tariffs on US imports.

Speaking during a local elections campaign tour, Sir Keir said: “A trade war is bad for working people and bad for our businesses, but I don’t think we should jump into a trade war. I think it’s better if we try to negotiate a better outcome and that’s what we are trying to do.”

Instead he is expected to impose quotas that stop the UK being flooded with cheap goods normally destined for the US, and dilute the electric vehicle demands on car manufacturers as well push bacj the deadline on the switchover to green fuels.

The impact on Scotch whisky and the wider food and drink sector may not be as severe as some feared. Food and drink is Britain’s fifth-biggest export, with about 10% heading to the US. The UK has a trade surplus of £1.6bn of exports against £1bn of US imports.

Of this, Scotch whisky accounts for about £974m and it suffered a huge setback when Trump imposed 25% tariffs during his first term. This was revoked by President Biden.

A potential gain this time is that UK products will be cheaper in the US than EU-produced alternatives. This may persuade US consumers looking to buy overseas brands to continue buying products from the UK.

Another beneficiary could be Northern Ireland which may become a useful ‘go-between’ for EU companies seeking a lower tariff route into the US. Northern Ireland is the only place in the world with tariff-free access to both the UK and EU and shares the UK’s 10% tariff rate, half the rate imposed on the EU.

One Belfast-based business leader said this created an “astonishing sales pitch” which should encourage manufacturers to head to the province.

Meanwhile, investors suffered a painful day of losses with $2.5 trillion wiped off the S&P 500 index as tech and consumer companies suffered the brunt of the sell-off. Apple lost more than $300bn in value. The FTSE 100 fell by 1.6%.

Economists are ripping up forecasts and are expected to downgrade the outlook for all economies amid concern that UK taxes may have to rise.

See also: Scottish and NY chambers agree trade partnership