Overview

• The UK government has opted against retaliatory tariffs on US steel and aluminum imports, focusing instead on securing a broader economic deal with the US.
• Chancellor Rachel Reeves emphasized a calm, pragmatic approach, stating that retaliation could jeopardize the potential trade agreement.
• Economists warn that US tariffs could push the UK economy into recession or significantly lower growth, even if exemptions are achieved.
• The Office for Budget Responsibility estimates that the tariffs could reduce UK GDP by 0.6%, equating to an £18 billion economic hit.
• The UK government has prepared for all scenarios, with Reeves not ruling out potential tax increases to address fiscal pressures from the tariffs.