Keir Starmer claims UK ready to retaliate against US tariffs after Donald Trump vowed to spare Britain

Britain is seeking an exemption, arguing that, unlike other nations, the UK has a relatively balanced trade relationship with the US.

Starmer has expressed a desire to avoid a trade war.

US President Donald Trump has imposed a series of tariffs on goods from other countries, claiming the measures will support American manufacturers and protect jobs, despite concerns that they could lead to higher prices for consumers.

The tariffs on vehicle imports to the US will begin on April 3, with taxes on parts expected to start in May or later.

A Government source said “we won’t stop trying” to negotiate a UK exemption even after Trump’s deadline.

If the tariffs are implemented, it remains unclear what form of retaliation the UK might take.

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Several options are on the table, ranging from imposing duties on sectors where British products are vital to the US, to targeting specific items like Harley Davidson motorcycles.

One expert told the BBC that the most drastic—and least likely—option would be to target financial services.

However, despite the UK's threats, ministers are keen to avoid a trade war.

The PM said earlier this week that the UK would not be “jumping into” one with the US, adding the Government was carrying out “intense negotiations” to avoid tariffs and would be “pragmatic and clear-eyes” in its response.

The independent Office for Budget Responsibility has cautioned that a retaliatory trade war would significantly harm economic growth, potentially erasing the surplus the chancellor has set aside to adhere to her self-imposed fiscal rules.

The latest comments come just weeks after Donald Trump promised Britain would be spared from his trade war and could be in line for a "trade agreement" in an Oval Office sit down with the Prime Minister.

Just hours after slapping down the EU and hailing Brexit as the "right thing at the right time", the tariff-happy President said a deal was in line to come "very quickly".

"We're going to have a great trade agreement," Trump said. "We're going to end up with a very good trade agreement for both countries, and we're working on that as we speak."

Starmer, a few minutes later, promised that he and Trump "will work on a new economic deal with advanced technology at its core".

Former Labour minister and chair of the Commons Treasury Select Committee Dame Meg Hillier has warned that the Government's commitment to free trade will be tested in the coming weeks due to Trump's tariffs.

The US President has claimed the 25 per cent levy would lead to “tremendous growth”, promising it would spark new jobs and investments in the US.

However, there are worries that it would lead to a temporary pause in car production in the US, increase prices and strain ally relationships.

Last year, the US imported around eight million cars. Mexico was the top supplier of cars, followed by South Korea, Japan, Canada and Germany.

The imports accounted for about $240billion (£186billion) in trade and roughly half of overall sales.

According to car industry body the Society of Motor Manufacturers and Traders (SMMT), UK car exports are worth about £7.6billion per year, and the US is the second largest market for UK cars after the EU.

SMMT said Trump’s announcement was “not surprising but, nevertheless, disappointing”.