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U.K. Prime Minister Starmer Plans Bold Industrial Policy to Combat U.S. Tariffs

4/6/2025
In a decisive move against the recent U.S. tariffs, U.K. Prime Minister Keir Starmer vows to implement industrial policies aimed at shielding British businesses. He emphasizes the need for intervention and competitiveness amidst a shifting global economy.
U.K. Prime Minister Starmer Plans Bold Industrial Policy to Combat U.S. Tariffs
Keir Starmer outlines plans to counter U.S. tariffs with industrial policies to protect British businesses, emphasizing the urgency of adapting to global economic changes.

U.K. Prime Minister Keir Starmer Responds to U.S. Tariffs

In a significant announcement, U.K. Prime Minister Keir Starmer stated that his government is prepared to implement industrial policy as a strategy to mitigate the impact of the new tariffs imposed by the Trump administration. In an op-ed published in the Telegraph late Saturday, Starmer emphasized that all options are being evaluated in response to these tariffs, highlighting the need for immediate action to protect British businesses.

Prioritizing British Business

Starmer articulated a commitment to using industrial policy as a shield against economic challenges. "We stand ready to use industrial policy to help shelter British business from the storm," he wrote. He acknowledged that the idea of state intervention may make some feel uneasy, but stressed the necessity of adapting to the rapidly changing global landscape. "We simply cannot cling on to old sentiments when the world is turning this fast," he remarked.

Immediate Actions and Strategic Plans

As part of his response, Starmer vowed to enhance the plans aimed at boosting the competitiveness of the U.K. economy. This comes in the wake of the U.S. imposing a baseline tariff of 10 percent on all U.K. imports, a move that dashed hopes for an exemption from President Trump's tariff campaign. In his op-ed, Starmer highlighted the critical need to remain calm and to negotiate the best possible deal moving forward, reiterating that "all options are still on the table."

Political Support and Perspectives

Support for the government's approach was echoed by Conservative Party leader Kemi Badenoch, who stated on Sky News that refraining from immediate retaliation is the right course of action. Badenoch warned that retaliatory tariffs could escalate into trade wars, ultimately harming both economies.

Collaborative Efforts with the EU

In a proactive move, Starmer engaged in discussions with European Commission President Ursula von der Leyen on Sunday to strategize a collective response to the U.S. tariffs. Von der Leyen underlined the EU's commitment to collaborate with allied nations in addressing the challenges posed by this evolving global economic scenario.

International Reactions and Future Considerations

Internationally, France is proposing measures such as targeting Big Tech companies' data usage in retaliation to the U.S. tariffs. French Economy and Finance Minister Eric Lombard indicated that France is also contemplating a tax on digital services. Meanwhile, French Prime Minister has criticized Trump's trade policies, claiming they could reduce France's economic growth by over 0.5 percentage points.

Vision for a Transatlantic Free-Trade Zone

In a broader context, tech entrepreneur Elon Musk expressed hopes for a future zero-tariff situation between the U.S. and the EU, envisioning a transatlantic free-trade zone as a potential resolution to ongoing trade tensions. This optimistic perspective aligns with efforts by the EU to attract top scientific talent from the U.S., as various local and national governments mobilize to recruit leading scholars amidst the trade disputes.

Conclusion

As the U.K. navigates these turbulent trade waters, Prime Minister Keir Starmer's emphasis on industrial policy and international collaboration could play a crucial role in safeguarding the nation's economic interests. The upcoming weeks will be pivotal in determining the effectiveness of these strategies and the overall impact on British businesses.

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