Britain is facing down permanent 10 per cent tariffs on exports to the US even if it reaches a deal with Donald Trump, the President's allies have warned.
Ministers are growing concerned that securing an outright exemption from the levy might not be possible - despite Trump's tariff U-turn just days ago.
Senior US economic adviser Kevin Hassett has said that the White House is in talks with around 20 countries on some kind of economic deal - with two countries, thought to be the UK and Australia, the closest.
He said: "I think everybody expects that the 10 per cent baseline tariff is going to be the baseline. It is going to take some kind of extraordinary deal for the president to go below there."
Britain is facing down permanent 10 per cent tariffs on exports to the US even if it reaches a deal with Donald Trump
REUTERS
This side of the Atlantic, a senior Government source told The Times that while there was less optimism about removing the 10 per cent tariffs, there was a high degree of uncertainty.
"Things change by the day," they said.
Economists have also warned that 10 per cent tariffs and a global trade war could spark a 0.6 per cent hit to GDP - wiping out this morning's growth announcement, and then some.
Sir Keir Starmer confirmed yesterday that he has not spoken to Trump since he brought in the tariffs - but vowed: "We have got a very strong relationship on defence, security, intelligence-sharing. No two countries are as closely aligned as ours."
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Sir Keir Starmer confirmed yesterday that he has not spoken to Trump since he brought in the tariffs
PA
Later on Friday, Rachel Reeves vowed that the UK was "resolved" to do everything it can to secure the "best deal possible" with the US.
Asked whether she was losing confidence in the prospect of a US trade deal and turning Britain to other partners instead, the Chancellor insisted the UK was committed to negotiations with Washington.
She told reporters: "We continue to engage with our counterparts in the United States, and of course we want to secure the best deal possible for British jobs and British industry. And we are absolutely... resolved to do everything we can.
Rachel Reeves met Indian Finance Minister Nirmala Sitharaman in London this week
PA
"But, at the same time, we also want to improve trading relations with other countries around the world.
"It's why I hosted the Indian Finance Minister in London this week as part of our economic and financial dialogue, and to try and secure a free trade and investment treaty with India.
"It's also why we are having a summit with the European Union in May to improve our trading relations.
"I'll be travelling to Poland later today to meet with my finance minister counterparts from across Europe."
