UK-US Trade and Tariffs

11:51:00

With permission, Madam Deputy Speaker, I would like to make a statement on the United Kingdom’s economic relationship with the United States. The UK has a strong and balanced trading relationship with the US worth £315 billion, which supports 2.5 million jobs across both our countries. This is second only to the EU, where our trading relationship is worth £791 billion.[Official Report, 8 April 2025; Vol. 765, c. 6WC.] Yesterday evening the United States announced a 10% reciprocal tariff on UK exports, and it has today imposed a 25% global tariff on cars. That follows the application of tariffs of 25% on US imports of steel, aluminium and derivative products announced on 12 March. No country was able to secure an exemption from those announcements, but the UK did receive the lowest reciprocal tariff rate globally. And although that vindicates the pragmatic approach the Government have taken, we know that while the tariffs are still being levied the job is far from done. We are, of course, disappointed by the increase in tariffs on the UK and on other countries around the world. The impact will be felt among all trading nations. But I would like to update the House on how the UK can navigate these turbulent times, acting in our national interest and for the benefit of all our industries. I would also like to take this opportunity to thank my American counterparts, Secretary of Commerce Howard Lutnick, US trade representative Jamieson Greer, and special envoy Mark Burnett for their engagement over the past few months. While any imposition of tariffs is deeply regrettable, from the beginning they promised to make themselves available and they have been true to their word. I look forward to our continued engagement over the days ahead. As Members will know, since the new US Administration took office, my colleagues and I have been engaged in intensive discussions on an economic deal between the US and the UK, one that would not just avoid the imposition of significant tariffs but deepen our economic relationship. On everything from defence, economic security, financial services, machinery, tech and regulation, there are clear synergies between the US and UK markets. That is reflected in the fair and balanced trading relationship that already exists between our two countries. I can confirm to the House that those talks are ongoing and will remain so. It is the Government’s view that a deal is not just possible but favourable to both countries, and that this course of action serves Britain’s interests as an open-facing trading nation. I have been in contact with many businesses, across a broad range of sectors, including those most affected, who have very much welcomed this approach. It is clear to me that industry itself wants to grasp the opportunity a deal can offer and welcomes the Government’s cool-headed approach. In increasingly insecure times, I have heard some Members cling to the security of simple answers and loud voices. I understand the compulsion, but I caution Members of this House to keep calm and remain clear-eyed on what is in our national interest, not simply to proclaim that we follow the actions of other countries. The British people rightly expect the Government to keep our country secure at home and abroad, and an unnecessary, escalating trade war would serve neither goal. True strength comes in making the right choices at the right time. Thanks to the actions of our Prime Minister, who has restored Britain’s place on the world stage, the UK is in a unique position to do a deal where we can, and to respond when we must. It remains our belief that the best route to economic stability for working people is a negotiated deal with the US that builds on our shared strengths. However, we do reserve the right to take any action we deem necessary if a deal is not secured. To enable the UK to have every option open to us in the future, I am today launching a request for input on the implications for British businesses of possible retaliatory action. This is a formal step and it is necessary for us to keep all options on the table. We will seek the views of UK stakeholders over four weeks until 1 May 2025 on products that could potentially be included in any UK tariff response. This exercise will also give businesses the chance to have their say and influence the design of any possible UK action. If we are in a position to agree an economic deal with the US that lifts the tariffs that have been placed on our industries, this request for input will be paused, and any measures flowing from it will be lifted. Further information on the request for input will be published on great.gov.uk later today, alongside an indicative list of potential products that the Government consider most appropriate for inclusion. I know that this will be an anxious time for all businesses, not just those with direct trade links to America. Let me say very clearly that we stand ready to support businesses through this. That starts by ensuring that businesses have reliable information; any businesses that are concerned about what these changes mean for them can find clear guidance and support on great.gov.uk, where there is now a bespoke webpage. This Government were elected to bring security back to working people’s lives. At a time of volatility, businesses and workers alike are looking to this Government to keep our heads, act in the national interest and navigate Britain through this period. While some may urge escalation, I simply will not play politics with people’s jobs. This Government will strive for a deal that supports our industries and the well-paid jobs that come with them, while preparing our trade defences and keeping all options on the table. This is the right approach to defend the UK’s domestic industries from the direct and indirect impacts of US tariffs in a way that is both measured and proportionate, while respecting the rules-based international trading system. As the world continues to change around us, British workers and businesses can be assured of one constant: this is a Government who will not be set off course in choppy waters. The final part of our approach will be to turbo-boost the work this Government are doing to make our economy stronger and more secure, including our new industrial strategy. We will strike trade deals with our partners and work closely with our allies for our shared prosperity. We have a clear destination to deliver economic security for working people. We are progressing a deal that can do just that, laying the foundations to move quickly should it not, and ensuring that British businesses have a clear voice in what happens next. I commend this statement to the House.

I call the shadow Secretary of State.

11:58:00

I thank the Secretary of State for advance sight of his statement. Businesses, workers and their families woke up this morning with greater fear and more uncertainty about their future. Tariffs make us all poorer by pushing up costs, suppressing demand and making the pound in our pocket buy less of the things we need. It is free trade to which we owe our past prosperity, and free trade that has lifted billions out of poverty since the second world war. This is a moment for calm words and cool heads, and we will support the Government when they do sensible things to reverse the impacts on our already fragile economy. I am glad they have recommitted to reaching a deal with our closest ally and largest single country trading partner. However, this is also a moment for honesty and telling the truth. The Government, sadly, got no special favours from the White House last night. The Secretary of State refers to vindication. This is no vindication at all. We are in precisely the same band as the Congo, Costa Rica, Kosovo and Christmas Island. In fact, I can count more than 125 countries and territories that have the same US tariff levels as we now do—not that special. Our automotive manufacturers face unchanged tariffs of 25% on around £8 billion-worth of cars and auto parts exports. Steel and aluminium exports remain at 25% and, on a volume-weighted basis, our exports face an average tariff of closer to 13%. Above all, last night was a vindication of those who were pilloried and abused for wanting our country to have the freedom to decide our own trade policy. If Labour and the Liberal Democrats had their way, we would still be in the EU. As the Prime Minister acknowledged this morning, thousands of British jobs have been saved today as the result. I hope that he and his colleagues had the decency to regret the 48 times that they voted to stay in Europe, and to thank us for getting Brexit done. Last week, the OBR warned that these tariffs could knock up to 1% off GDP. We are already in a per capita recession and markets are falling this morning. It is businesses that create jobs and grow our economy, yet, at every turn, the Government have piled on headwinds when they need our support. They put a tax on jobs, more than doubled business rates for many, introduced the family business death tax and are barrelling ahead with flawed recycling charges. No wonder business confidence remains at rock bottom. To help British exporters survive, the Government must urgently tackle our sky-high energy costs. A business in Birmingham, west midlands, faces energy costs that are four times those of its competitors in Birmingham, Alabama in the US. That dwarfs the impact of tariffs and is no basis on which to compete. The Secretary of State was responsible for the Employment Rights Bill, which will hit businesses so hard that the OBR has not even begun to assess how much it will hurt the economy. Now is the time, today is the day for the Secretary of State to walk back to his Department and, in the national interest, instruct his officials to shelve the Employment Rights Bill. He should put ideology aside, put the unions on hold and put the Government on the side of British business. The cost of failure is too high, the burdens on business are too great and time is too precious, the Secretary of State must act and act fast. Let me conclude with some questions for the Secretary of State on behalf of all our constituents. Will he publish an urgent assessment of the impact of today’s tariffs on the UK economy so that the markets can see whether the Chancellor’s emergency Budget sums still add up, or whether she will be back for more taxes? When will he give the car makers the clarity they need on the ZEV—zero emission vehicle—mandate? Will he undertake to keep Parliament informed and to publish the UK’s broader objectives—not its negotiating strategy, but the broader objectives—in these trade negotiations with the UK, precisely as the previous Government did in March 2020? Will he assure us that any deal will back British farmers and food producers and uphold our high environmental protection and animal welfare standards, which we have enhanced and upheld in the agreements that we have reached since leaving the EU? Will the Secretary of State now surge additional resources for exporters, reallocating resources across Government to fund a new version of the UK trade show programme and enlarge the GREAT campaign? What consideration are the Government giving to the special situation of Northern Ireland? Will he guarantee that all claims under the duty reimbursement scheme for Northern Ireland will be paid promptly and the Government will commit additional resources when required? Can he reassure us that, in the event the UK did see a major trade distortion in Northern Ireland, the Government would be prepared, if necessary, to trigger article 16 of the Windsor framework? Will he reassure the House that any concessions to UK tech giants on the digital services tax will not simply shift the burden to the United Kingdom’s small businesses? The Conservatives are on the side of business and Britain. We understand the gravity of the situation, and we will support the Government where they act in the national interest. I hope that they will take this moment seriously, get back around the table with their US counter- parts and involve the House in their deliberations.

I thank the shadow Secretary of State for his response and his tone in responding. I recognise his commitment to free trade and the case he has made for it. I believe it is something we broadly share. He asks for honesty—that is always good in Parliament—but he is a little bit flippant about the position we find ourselves in today. He mentions a series of countries—Christmas Island, Kosovo—that do not have the kind of complex trading relationship that we have with the United States. The shadow Secretary of State can see from my tone, presentation and words that I am disappointed that we are in this position, but I look at the EU, facing a tariff of 20%; at Japan with 24%; at India with 26%; and at Canada and Mexico with 25% tariffs already in place. Yes, we are in a more favourable position compared with those key friends and allies, but we must go further, especially in relation to the tariffs on the automotive sector, which is a particular concern for me. The shadow Secretary of State again brings up Brexit, which was perhaps not the Conservative party’s finest hour in preparing the state for large trade shocks, but let us pass over that. As the President of the Board of Trade, I am of the view that it is good that we can set our own trade policy, but I say to him and to all colleagues: is it not time that we try to unite the country for the future, rather than keep on harking back to the past? Is that not how we will find our way through this? Half the country voted one way, and half voted the other way, but let us build together and look to the future. It is the right way forward. My next point is very important: it is false to see this as a choice between working with the US and working with the EU. We can work in a way that is consistent with both, and we should all be committed to that. The shadow Secretary of State also asked about the implications for the United Kingdom. Broadly, he asked me to reverse a series of policy choices made in the last 14 years; I will go through all of those. In relation to the spring statement, the Chancellor had already rebuilt the headroom substantially higher, due to the global turbulence, than that bequeathed her by the Conservative party. On the Conservatives’ spending plans, they left no business rates relief whatever: it was a one-year relief, rolled over, that never had any longevity. I have not yet received any credible proposals on how their spending plans would be paid for, but I am always available to receive those in writing. The shadow Secretary of State asks for reassurance, which we are always happy to provide on domestic policy changes. On things like the ZEV mandate for the automative sector, we are more pragmatic than the Conservative party was when in office. As he knows, the Department for Transport leads on that policy, but our response to the consultation on potential changes will be published soon. As colleagues would expect, I will not comment on the details of any negotiations with the US. In our manifesto, we committed to the UK’s sanitary, phytosanitary and food safety standards system. Of course the Government will adhere to that. The shadow Secretary of State also knows that we are imminently preparing to publish our trade strategy, which covers a lot of these issues, particularly around support for exporters that we want to proceed with. Northern Ireland is an incredibly important issue for all colleagues. The potential for a differential response from the European Union could lead to a difficult situation in Northern Ireland. As the Secretary of State highlights, the key policy is the duty reimbursement scheme, because goods entering Northern Ireland from the US that will not go into the wider single market are subject to the reimbursement programme. We must make sure that that works well. I recognise the points that he has made on it, and I will continue to update the House and all colleagues on our work in this area. I recognise how important and relevant it is to all our constituents, so we will endeavour to keep all colleagues updated on progress.

Workers at BMW at Cowley are deeply concerned by the recent news. BMW is right that a trade war would have no benefits. The Secretary of State is right to engage calmly with his US counterparts, but what discussions has he had with his EU counterparts, given how integrated our automotive sector is with that of EU countries?

My right hon. Friend is right that some of our iconic automotive manufacturing brands, such as BMW, Jaguar Land Rover and Aston Martin, have had particular success in the US market and are therefore exposed to tariffs. There is close co-operation in Government between the teams working on our EU reset and on our trade negotiations in this area, so I assure my right hon. Friend of the alignment, continuity and consistency of our policy. My right hon. Friend will know that, along with the changes to domestic policies such as the ZEV mandate, there was significant money in the Budget for incentivising the roll-out of infrastructure for electric vehicles, and £2 billion has been put aside for the wider joint collaboration and research and development initiatives with the automotive sector, which remains a clear and consistent Government priority. I will keep my right hon. Friend updated given her particular constituency interest.

I call the Liberal Democrat spokesperson.

I thank the Secretary of State for advance sight of his statement. Donald Trump has launched a destructive trade war that threatens the jobs and living standards of people across the UK and around the world. Let us be clear: this is not about reciprocity or a level playing field. The US is conflating our high British standards with trade barriers, and it is doing so on purpose. This is Donald Trump saying to the UK that he will lower tariffs only if we lower standards. He is saying, “Sell out your NHS to US vulture firms, or else; sell out your farmers to US big business, or else; and give up protections against online scammers and for children’s safety to US tech barons, or else.” If the Government give in to Trump’s threats, it will only encourage him to use the same bullying tactics again and again. It is simultaneously true that the way the White House has made its crude calculation actually makes Britain’s negotiating position a bit better than the position of other countries, and we genuinely welcome that—it is a relief to us all. With regret, there is, however, no sign that the Government’s lobbying has borne any fruit, given that we have been put on the same regime as a number of other countries such as Honduras, Peru and Guatemala. This must be a wake-up call. We Liberal Democrats believe that we must end this trade war as quickly as possible, which means standing firm with our allies against Trump’s attempts to divide and rule. Will the Government take urgent steps to bring our Commonwealth and European partners together in an economic coalition of the willing against Trump’s tariffs? We welcome the month of consultation with business; will the Government confirm that they will look at energy costs and business rates reform as part of that four-week consultation, especially in respect of the car industry? Will the consultation run in parallel with talks with our allies to draw up plans for the co-ordinated use of retaliatory tariffs? When do the Government expect to publish an assessment of the impact of the tariffs on small businesses, jobs and the cost of living? Will they look seriously at launching talks with the EU to create a bespoke customs union? Let us be clear: the UK would not be in a worse place if the Government had heeded our calls to negotiate a customs union. Even the Conservative party should be able to see that Turkey has been in a customs union with the EU since 1995, and it has likewise been hit with tariffs of only 10%. Finally, will the Government rule out once and for all the watering down of the digital services tax, or our digital competition regulations, to appease Trump’s billionaire backers?

I am grateful to the hon. Lady for her questions and her submission. I am pleased to hear that she feels we need to end any potential trade war—although I am pretty certain I heard her in the media last week demanding that we escalate the trade war. I do not think that is in any of our interests, and it is not the route and direction we need to go in. The hon. Lady mentions that there is no sign of the UK being treated in any different way; she will know that the US has a view of VAT that we do not share—the US compares VAT to its sales tax. If we look at our rate of VAT and the comparable treatment of the European Union, we see that there is a differential. That does not satisfy me, because I believe we could seriously get to a position in which we not only avoid the imposition of additional trade tariffs and barriers, but deepen our trade relationship and remove some of the barriers that already exist, particularly in the trade in services. That is the Government’s objective. We of course work closely with a whole range of friends and allies, but when they go into any negotiation, they represent their own national or customs union interest, and we do the same. I would not expect any country to go into a negotiation trying to represent the UK; other countries will have their own interests. I do the same for the United Kingdom: I have to put our interests first. There is a different structure to the trading relationship between the US and the UK—for instance, the US does not have with us the large deficit in traded goods that it has with the EU or China—so it is a different level of conversation and it allows us to put our own interests first. That is all that the Government seek to do in our policy towards the US. The hon. Lady mentions a range of other issues that I recognise. Colleagues know that I had strong views on the very large increases in industrial energy costs that occurred after 2010—there was an increase of almost 50% in real terms—and I think they need to be addressed. The industrial strategy and other Government initiatives set out our wider policy objectives and tools in this area. The consultation and call for input that I announced today is much more about the formal steps we need to take to understand from businesses the impact and give them the chance to put forward their views. As I say, that will not be necessary if we can come to an agreement, which I believe all Members want us to do. I believe that the relationship can be deepened. If we get it right, it will not come at a cost to our other key trading relationships, such as with the European Union. That is the Government’s objective and I welcome any support from throughout the House for fulfilling it.

I thank my right hon. Friend for his statement. Yesterday’s dramatic shift in US trade policy marks an historic abdication of the principles of open commerce and global trade that have underpinned the economies of the western world since the end of the second world war. Tariffs bring no winners—there are only losers, through higher costs for consumers and higher barriers for business and industry. Will the Secretary of State set out how the Government are working with international institutions such as the World Trade Organisation to prevent further escalation and position the UK as a leading champion for open markets?

I warmly welcome my hon. Friend’s question. He is right that this is a substantial change in US policy. It is important that, even if we do not agree with some of the decisions made and the thinking that underpins them, we recognise where they come from. Indeed, they were part of the US presidential campaign, so we have been able to prepare the ground for our conversations. My hon. Friend asked about international co-operation. We are strongly involved with the WTO, and particularly supported the re-election of Dr Ngozi as its director-general. It is important to remember that despite the problems the multilateral system faces, it is still the basis on which the vast majority of trade around the world takes place. We will continue to play a constructive role in relation to the WTO, and any multilateral organisation, where that serves our interests.

What was missing from the Secretary of State’s statement, and from his reply to both Opposition Front-Bench spokespeople, was the Government’s estimate of the cost of the tariffs, particularly in the context of the Chancellor’s fiscal headroom. Will the Secretary of State update the House on that specifically?

As a former Treasury Minister, the right hon. Gentleman will know the kind of work that goes on to make sure that such assessments are made. The announcement came late last night; it is only last night and this morning that we have had the chance to respond to it. He will also appreciate that the impact on the UK is about not just the direct relationship between the US and the UK, but what happens in the wider global trading system. How other countries choose to react to the US announcements will be the determining factor for the impact on the UK, and we do not know that at this stage. I promise to keep the House updated, and to update the right hon. Gentleman personally, if he wishes, at any stage on our work to assess the impact on the UK. For all Members of Parliament, this should be a time for reassurance, for calm heads and for giving clear information to British business on how we will navigate these difficult times. That is the correct message to send out from Parliament.

If those on the Opposition Front Bench are still trying to propagate the arguments of 2016, I suggest they are a bit drunk on chlorinated chicken. We need to get real. Celebrating a tariff of 10% rather than 20% is like a person celebrating the fact that when they were mugged, only their wallet was taken, not their watch as well. The British public deserve better. I am grateful to the Secretary of State for talking about our relationship with Europe, because who knows what President Trump will bring next week? We do five times more business with the European Union than with America. It is in our interest to have a close and stable trading relationship with Europe, but right now, that is up for grabs, too. What do the tariffs mean for the Secretary of State’s negotiations on the European reset, and for the summit in May?

I am grateful to my hon. Friend for her question. Let me be clear again: no one is celebrating the position that the country found itself in this morning. We recognise the differential for the UK, but all of us in the House—Members from all parties—are disappointed by the announcement from the United States, and are seeking to provide a way through. I know that my hon. Friend feels very strongly about this matter, but I reiterate to her that we do not have to make a choice between the US and the EU. They are two key, long-term and important trading partners, and security and defence partners as well. The EU summit next month is a key event. Our aspirations remain for an ambitious EU reset on trade, to rectify flaws in the agreement made by the previous Government. Our objectives are clear and were all in the manifesto on which Government Members stood for election and won. They remain a key priority. I assure my hon. Friend that the alignment in Government between the EU reset and the US negotiation is very strong.

The Business Secretary delayed and dithered for five months before meeting his US counterparts, and working people and businesses in the UK are paying the price for that dereliction of duty. Does he regret his refusal to meet his US counterparts earlier?

The hon. Lady is incorrect, and I must ask her to take a bit more of a serious tone in the questions that she brings to the House. This is really serious stuff. I have met my counterparts on many occasions, and we were in contact even before some of the formal procedures on the US side were confirmed. It was not technically possible to have been in touch with them sooner. Their engagement has been consistent and serious. She is incorrect, and I ask her to please approach these important proceedings with a bit more seriousness.

The US tariffs have serious implications for UK industry. They are a reminder of the importance of the industrial strategy and Government support, including for domestic steel- making capability, which, sadly, the Conservative party neglected badly over 14 years. Will my right hon. Friend confirm that he is fully committed to the plan for steel, and confirm the importance of our sovereign steelmaking capacity?

I am grateful to my hon. Friend for his question, and for the work that he did, alongside me, in this area over many years in opposition. He knows the commitment of the Government and Government Members to the steel industry. Of all the issues of industrial neglect that we were bequeathed, those are some of the harder ones to resolve; there is no doubt about that. He knows that our ambition is strong, whether we are talking about the future of British Steel at Scunthorpe and Teesside, or, in terms of sovereign capability, our aspirations under the steel strategy for new investments and new technology. The issues are difficult—particularly this week; I know that all the workers at Scunthorpe are concerned—but the Government’s commitment to and work on the steel sector will go on.

Can the Secretary of State offer us any guarantee that the Government will not enter into a trade deal with America that will allow the importation and sale in this country of food produced to lower environmental and animal welfare standards than those that we demand from United Kingdom farmers?

The right hon. Member knows that I will not go into the detail of any negotiation, but he knows of our manifesto commitment to our SPS regime, which I mentioned to the shadow Secretary of State. That commitment is important to the Government, and it affects all our trade negotiations, not just this one.

I welcome the Secretary of State’s statement. The port of Felixstowe is the UK’s busiest container shipping port. Though we import more than we export, we are also the ninth-largest exporter, and the USA market is important for our local and national trading markets. Last night’s news will likely have a significant impact on global trading markets, and it is not an exaggeration to say that it could change the global trading consensus of the last 80 years. Just as President Trump is acting in what he believes is his national interest, will the Secretary of State reassure me and my constituents in Felixstowe and across Suffolk Coastal that he and the Prime Minister will act firmly in our national interests, and do whatever is necessary to protect British jobs, British trade and industry, and British consumers?

My hon. Friend is right to talk about the historic scale and significance of the announcement last night, particularly for her constituency, which has economic infrastructure that is so vital to the country, and how we will process the scale of the changes. I assure her that the Prime Minister, members of the Cabinet and I as the Secretary of State are at all times doing what she mentioned, in the decisions that we have had to make at pace, so that we can put our national interests forward in a way that has allowed us to progress negotiations and to keep opportunities open.

For all the carefully choreographed bonhomie in the Oval Office last November, the Prime Minister failed to secure a US military backstop for his coalition. Despite No. 10 briefing a narrative about productive discussions at the weekend, the Prime Minister has admitted to business leaders that there will be an economic impact from the decisions that the US has taken. On Times Radio this morning, the Business Secretary said that he would roll up his sleeves to try to remove the impact on businesses entirely. That is a bold claim, given the circumstances and the impact that the Chancellor’s Budget is already having. What timeframe does he envisage for an economic deal with the US? What will he be doing until 1 May while waiting for the views of UK shareholders?

The hon. Member will have heard me this morning on the media and here in Parliament being clear about how we feel about these decisions. We are deeply disappointed that no country has been able to secure an exemption from the tariffs, but we remain committed to working hard to deliver a potential way through this. The hon. Member asked how we will respond. Respectfully, the statement covered the fact that we will ask British businesses to work with us on the necessary formal steps. On the timeframe, I shadowed a lot of Conservative Business Secretaries in the last few years—there was fairly rapid turnover at one point—and some of them gave all kinds of timeframes and commitments on trade deals, but that is not in our interests because it puts pressure on us in the negotiations. The US side will have timescales that it wants to engage on, but I believe that no country in the world is further advanced in its talks with the United States, and hope and optimism comes from that.

Chi Onwurah will be followed by Steve Darling.

The US is our closest ally and the world’s largest economy, as well as being the UK’s greatest source of foreign direct investment, so I welcome my right hon. Friend’s calm and pragmatic approach, and his determination not to abandon British workers’ rights in the face of these tariffs, as the Conservatives urge us to, but rather to focus on the trade talks. Will the Online Safety Act 2023, the Digital Markets Competition and Consumers Act 2024 and the digital sales tax be part of the talks? Will he also say a little more about his counter-argument to the Trump Administration’s view that VAT and the DST represent tariffs, rather than tax?

My hon. Friend reminds me that I did not get a chance to respond to the shadow Secretary of State. If, following these announcements in the United States, we had come to Parliament and said, “You know, the answer to this is that low-paid people will not get the sick pay they would otherwise have got under this Labour Government,” that would have been the wrong response. Again, as ever, that would be scapegoating the wrong people for difficult things that have nothing to do with their position in the UK economy. My hon. Friend skilfully leveraged in a number of questions. There are real differences of opinion between us and the United States on VAT. We say that it applies, as it does, to domestically produced goods as much as to goods that come into the UK, and that it is not trade distorting; indeed, the balance of trade between the US and the UK is evidence of that. The argument from the US is slightly different. I will not go into the content of all the negotiations—she will appreciate that—but success in any negotiation is about being willing to be at the table and put forward our argument, while recognising the other side’s argument. That is the approach of this Government, and that is the way forward.

We must stand up to the bully that is Trump and support British business. This morning, I reached out to Gooch & Housego, a manufacturer in Torbay of fibreoptics that help to facilitate international communications. It has interests in manufacturing in the US, the UK, Europe and Thailand. It and other players in the high-tech sector now have an extremely complex world to navigate. How does the Secretary of State plan to help the high-tech sector navigate the challenging world that we now live in?

Our job is to defend the UK national interest, and the company in Torbay that the hon. Member described—it sounds like a fantastic company —is an exemplar of why I want businesses to be based in the UK: because they can then access a whole range of markets from the best possible position. That is exactly the kind of company that, because of complex supply chains, will have questions about what the announcements mean for it. We decided to launch bespoke information on great.gov.uk today to coincide with this announcement precisely to attempt to provide such companies with the assurance that they need. A business like that can genuinely help us through this difficult period, because whatever hon. Members think of the President and his agenda, that agenda is based on returning a certain type of good-quality manufacturing job to the United States, and in many cases British firms and British business already provide those. They will provide more if we can find a way through these trade tensions and the imposition of tariffs, so they can work with us on the solution to these problems. I am grateful to the hon. Member for mentioning that company.

I am pleased to hear the Secretary of State’s commitment to steel. Stocksbridge Speciality Steels in my constituency is a strategically significant site with world-class, unique capability for creating specialist parts that will be essential in increasing our defence capacity and net zero infrastructure. Last week, I held a community listening event on the Government’s excellent steel strategy. The message was clear: let us ensure that British-made steel is best. Does the Secretary of State agree that today’s news further demonstrates why it is so important that this Government are committed to a £2.5 billion plan for steel?

I greatly appreciate my hon. Friend’s advocacy for steel. She puts the case extremely well, which is that the kind of products that we make in the UK steel sector and which, in the main—where we export them to the US—are niche, high value and in critical sectors such as defence and the manufacturing supply chain, are complementary to the US. That is a good case of why I believe there is no need and no argument for the imposition of tariffs in the sector. Our steel sector is complementary to the US, whether that is in defence or the manufacturing supply chain. That is the basis on which we can find a way through this. My hon. Friend is right to say that the level of domestic support has increased considerably through the steel strategy and the £2.5 billion—£3 billion in total, including Port Talbot—that this Government have put forward. It is very important to us that we support the foundation industries. The steel strategy is a clear example of that.

From another steel constituency, I call Martin Vickers.

Dealing with the erratic Trump Administration must be something of a nightmare for negotiations. The unexpected can always emerge from the White House, but one certainty is that tariffs were going to form part of the Trump agenda. It is somewhat surprising that the Minister is only today launching a consultation about the implications of retaliatory measures. Building on the previous questions about steel, will the Secretary of State at least acknowledge that the current uncertainty in the whole of the world market increases the pressure on the Government to acknowledge that further support will be needed for that industry?

I am grateful to the hon. Gentleman for his comments. He knows that I always have time for him to discuss the particularly challenging constituency issues that he faces through the position at British Steel. Just to be clear, today’s announcement is the formal step necessary to engage with British business about last night’s announcements. That is an important stage and the right way forward, and we have been prepared for it. In relation to the other challenges around the steel industry, this is a particularly challenging situation—he and my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) know that better than anyone. Our commitment, even in difficult circumstances, is absolute. We will continue with that, and I will continue to keep him and his constituents updated at all times.

Many of us may remember a time when Boris Johnson and many of those on the Conservative Benches claimed that a trade deal with Donald Trump could increase our trade with the US by up to five times. It was clearly more difficult than they thought, but it is important to learn from failure. I wonder whether the Opposition had been in a position to pass on any pearls of wisdom or any advice—maybe even an oven-ready deal—that might help the country at this time of difficulties. [Laughter.]

I am grateful to my hon. Friend. I have been in touch with a lot of people who have been this country’s Business Secretary, including some Conservative colleagues who remain in touch. I find that, at times, to be a very useful and worthwhile thing. I cannot tell my right hon. Friend that I am in touch with Boris Johnson on this or any other matter. On the work of the previous Government, nothing substantive was negotiated in the trade talks they had with the US. This is a very different situation, but one where I think, if we get it right, there are gains. As I say, it is not just to avoid what was announced last night or before that on steel, aluminium and automotive tariffs, but to genuinely improve that trading relationship to our mutual benefit.

Tariffs are always and everywhere a diminution of the choice available to consumers. So it is not liberation day; it is the very antithesis. I hope the Secretary of State will bear that in mind as he considers the policy and the consultation on any retaliatory action.

I am grateful to the right hon. Gentleman for how he has put that. I think he is right on where the burdens of policy fall in that area. It is not in anyone’s interest. No one wins a trade war; that is impossible. However, it requires us to react in a way that is calm, reassuring and pragmatic and which seeks a way forward. I can tell him that that is exactly what this Government will seek to do.

I thank the Secretary of State and his colleagues for all he has done so far in negotiating an economic partnership deal with the US. The automotive sector is an incredibly important one for Cheshire and Merseyside, both for manufacturers such as Bentley, Vauxhall and Jaguar Land Rover, and the wider supply chain, which supports the employment of tens of thousands. The US is the biggest export market for Bentley Motors in Crewe, so it is likely to be at the sharp end of the tariffs. We all hope that my right hon. Friend’s calm-headed approach has meant that we are in the best position to secure a deal. What specific support does he have in mind for the automotive sector to help it weather the storm?

My hon. Friend is right to highlight that. I am tremendously proud of our automotive sector. Indeed, he may know that I come from and grew up in one of our automotive sector powerhouses, Sunderland, with the Nissan plant. It is incredibly important to lots of communities in the supply chain all around the UK, but particularly to our exports. The US is a key market, particularly for the high-value models, some of which he mentioned, which are incredibly valuable to this country. We want and seek to maintain that success. On the kind of support, first, it is about dealing with this issue. Secondly, there are things such as the announcement in the Budget of the £2 billion for collaboration with the private sector in the automotive field, the money incentives for electric vehicle infrastructure and the changes around the wider ZEV mandate that we are consulting on and about to publish a response to, for which we need a more pragmatic response than we have seen in the past.

Despite there being a trade deficit and despite the best efforts of this Government, including the Secretary of State, for whom I have a great deal of personal respect, the reality is that we have still been hit by significant tariffs from the States. People at home right now will be worried about jobs, inflation and the global headwinds, which will undoubtedly hit us irrespective of our own tariff situation. One industry in particular, back home in Scotland, that will be watching with eager eyes is the Scotch whisky industry, given the billions of pounds of exports that go to the United States. I do not want the Secretary of State to try and control—nor could he—Trump’s tariffs policy. What he can do, however, is control his domestic taxation regime. Will he take this opportunity to re-engage with the Chancellor in and around the Scotch whisky taxation status?

The right hon. Gentleman knows the value that we place as a Department on the incredible product that is Scotch whisky. We have a particular set of policy initiatives on geographic indicators to make sure the brand is protected, and I always do everything I can to support Scotch whisky, which is just absolutely world class and always will be. He is right to say that our joint success in Scotch whisky produces a prominence that sometimes makes it vulnerable to retaliatory measures because of the recognition of the success in that field. On domestic policy, I remain in close contact with the Chancellor on all matters and will do on this one. There are tremendous opportunities for Scotch whisky from some of the other trade negotiations that we are having, such as with India in particular, which is the biggest whisky market in the world, as the right hon. Gentleman will know. I think there could be real steps forward in terms of our market access there and the arrangements that we have, which will give us an advantage over other countries, and that is also a prominent part of our work.

War does not benefit anyone. A trade war between the UK and its closest ally will not benefit our industry nor our people and will stifle our ability to grow our way out of 14 years of Conservative mess. For that reason, I thank the Minister for his pragmatic and cool-headed approach. However, the measures also threaten our ability to prevent military conflict here on the continent of Europe. Will he detail what action he is taking to ensure that our air and space industry can work with our European partners to implement the defence industrial strategy, which is central to ensuring peace here in Europe?

My hon. Friend is absolutely right in his assessment of the burdens and benefits of solving the challenge we have been faced with by the announcements yesterday evening. He will know that the defence sector is one of the eight priority sectors of our industrial strategy. There is a whole range of work across areas like air and space that we are engaged in with Ministry of Defence colleagues. Of course, we have also had a significant increase in defence spending, which is a crucial part of how we respond to these threats. The US will always be a crucial security ally for us, and our shared interests—whether they are economic or in the defence and security space—are enduring. That is something we should always bear in mind as we try to find a way through.

I very much support the Secretary of State’s concerns about the automotive industry in this country. Will he therefore take action immediately to remove the arbitrary restrictions on the ability of our domestic motor manufacturers to produce and sell vehicles with internal combustion engines? The Government’s policy has already reduced the domestic production of vehicles in this country by a third between February last year and February this year. Why does he not lead by example and remove all tariffs on US vehicles?

I thank the hon. Member for his words on the automotive sector. On the ZEV mandate that he references, it was a policy of the previous Government to be clear. We inherited that policy. The consultation we have opened with our colleagues in Department for Energy Security and Net Zero and the Department for Transport will look at that in the context of a fall across all European markets in automotive production and demand, and this incredible entry on to the world economy of increased Chinese production, which is a challenge for all of us. He will also know that the automotive sector is very much an export-led sector—we export 80% of what we make—and all our key markets have the transition policies in place towards electric vehicles, so if we did not make that transition, we would not have a product to sell in those key markets. We have to work with industry to do it, but we also have to recognise that what we inherited from the Conservative party was not working. That is why we opened the consultation, and we will publish the response very soon.

I thank my right hon. Friend for his statement and for his efforts and those of his team thus far. I also welcome the fact that there will be engagement with businesses on the potential for retaliatory action—that input is vital. While the UK has the lowest rate of reciprocal tariffs, that will be cold comfort to the many businesses in my constituency of Bathgate and Linlithgow and, indeed, for those in the whisky and salmon industries, which employ thousands of people across Scotland. Will the Secretary of State assure the business community that he will work at pace with his team to secure a sustainable trade deal with lower tariffs and to bring much-needed certainty to businesses and households across this country?

I thank my hon. Friend for her support. We are taking steps to ensure that all options are on the table for the action we may need to take in future—that is important. It is inevitable when an announcement of this magnitude has occurred that businesses will be concerned, and I understand that will be what her constituents are telling her this morning. I absolutely assure her that the approach I have laid out today will be something that we continue to work towards at pace. Our tone, the assurances we can give and the fact we are approaching this with calm-headed pragmatism is vital, and that will be part of how we can reassure businesses. We will work to get to the position she articulates—a better set of trade terms with the US—and that is the objective of the Government.

The Business Secretary said in his statement, “True strength comes in making the right choices at the right time.” Will he assure parents, carers and young people up and down this country that he will show true strength with Donald Trump and his sidekick Elon Musk, and make the right choice by refusing point blank to trade away our children’s safety online in watering down—in any way, shape or form—the implementation of the Online Safety Act 2023?

I do believe that strength comes in making the right choices at the right time in our national interest. I can tell the hon. Member that the talks I have had with my US counterparts are not to do with what she has articulated; they are to do with goods, services, the regulation of professional bodies and all the things we would associate with normal trade talks. The United States is not seeking to make our children unsafe or more vulnerable. That is not the right approach to take to our key and core ally. I think sometimes the Liberal Democrats are inventing problems to try to propose that they are the solution. This is a conversation about trade, and it is vital that we keep it in those important and appropriate terms.

There is a threat, but there is also an opportunity. What measures is my right hon. Friend taking to combat trade leakage and the diversion of goods produced in countries hit by high US tariffs, which may dump their products in the UK, undercutting our domestic producers? What steps is he taking to encourage manufacturers based in those countries and, indeed, in the EU, to relocate to the UK and export from here to the US to take advantage of our lower 10% tariff?

I am grateful to my hon. Friend for raising one of the most important issues we face: the impact of trade diversion—not just the relationship between the US and the UK, but what it means for goods that potentially would have gone to other countries coming to the UK market. That is something we have to be extremely vigilant about. He will know that we have those safeguards in place on the tariffs already announced on steel and aluminium, and that we have our own quotas and 25% tariff to protect domestic production to ensure that that is not the case. I can tell him that we stand ready to use those powers for any sector of the economy that we need to use them for, or indeed to take further powers if that is deemed to be necessary. I want businesses to be based in the United Kingdom and to serve a whole range of markets from the United Kingdom. That pitch is not just about the comparative position we find ourselves in, but about the kind of policies we put in place to ensure we have the level of competitiveness we need. That is something that every country in the world is engaged in, but I assure my hon. Friend—not so much on the announcements last night, but on the wider agenda of the Government—that that is our commitment.

Tariffs are a tax on import paid by domestic businesses. As the Business Secretary reflects over the forthcoming weeks and consults with businesses, will he reflect on the taxes he has raised on our own domestic businesses and think about whether that is an appropriate response to what is happening?

We always reflect on the decisions we have made as the UK Government. I say to the hon. Member again—we have probably had this exchange a few times—that I am always willing to hear from the Conservative party how it plans to fund its spending plans, but it certainly did not set that out in the spending plans we inherited. If the Conservatives are ready to make a decision on that, we would love to hear from them, but until they do so, they should stop criticising us for fixing their mess.

I hope the Secretary of State agrees that protectionism is not the way to protect consumers and businesses. Our own history teaches us that: the Tory corn laws kept working people impoverished for generations in this country. I hope our approach will be that we should have free and fair trade with other countries and not see rising prices for British people, American people or people anywhere else in the world, and that we will do our best to ensure that people’s living standards rise by ensuring the fair and free flow of goods and services.

We have talked about not reliving the arguments of Brexit; my hon. Friend has brought up the corn laws—it is about time we had that one again. He will know that if we go back to arguments from the past, such as those around imperial preference, and look at the stance the Labour party took, it was always for free trade. That is because free trade makes food and other goods and services cheaper for the people we represent. That has always been our history and our commitment. What we are announcing today and how we are seeking a way through these difficult and disappointing sets of announcements is entirely consistent with our own history in the Labour party and our commitment to internationalism.

Diolch yn fawr, Madam Dirprwy Lefarydd. Some commentators are fawning over a 10% tariff simply because our nearest neighbours have been hit worse. Let’s get real: the 25% tariff on steel and aluminium will hit Wales’s biggest export to the US—machinery and transport equipment. The EU is Wales’s greatest trading partner, with Welsh exports valued at £11.2 billion. In the face of the American President’s obsession with international economic revenge, does the Secretary of State recognise that it is economic common sense to accelerate the scrapping of trade barriers with Europe?

I am grateful for that question. Again, the right hon. Lady can see that no one in this Government is fawning over the relative position we find ourselves in. That is why we are so determined to find a better way through. She is right to say that the announcement on steel and aluminium is a real danger to us, particularly the potential for derivative tariffs—that is, on a product that is not the raw steel or aluminium but is produced from them. That is why we are taking this so seriously. We have an ambitious commitment to the EU reset. We need a partner on the other side. There has been some relative political instability in some key European partners, and they have to be in a position to have that conversation. But I say again that this is not a choice between the US and the EU—we can tackle this together. We can improve our trading relationship with both partners and with India, the Gulf and other parts of the world, and it is the commitment of this Government to do so.

In January 2017, the then Conservative Foreign Secretary claimed that the UK would be “first in line” for a US trade deal; 2,722 days later, when the Conservatives left office, precisely nothing had been achieved. Incidentally, that is 37 times longer than the 73 days President Trump has been in power for his second term. Does the Business Secretary agree that it is hard to take the Conservative party’s criticisms of our trade approach seriously, given its appalling record on meeting its claims to be able to achieve trade deals? I urge him to continue with his calm approach to this, in the interests of businesses in Basingstoke and across the country, and to take those decisions in the national interest.

I am grateful for my hon. Friend’s support. There was no real progress on a federal level with the US under the previous Government. The former President made the decision that he would not pursue trade deals, so there was perhaps not much they could do on that, but I do sometimes reflect that the Conservative Government broke our relationship with our nearest and most important trading partner, which is the European Union; they then fell out with countries in the Gulf and could not do that deal; they could not do the deal with India; and they would not engage with China. For a global Britain policy, there is not much of the globe left if we find ourselves in that position. That is not best practice for us to follow, but we welcome Conservative Members’ support for our approach if it exists and continue to say that this is surely the right way forward for all our constituents.

Farming, textiles and whisky are all important parts of the economy in the Scottish Borders and across Scotland more broadly, and they will be affected by these tariffs. There are also real concerns in Scotland that products currently heading to the United States market from other countries will be redirected and dumped into the UK market, which will impact the domestic market. What action are the Government taking to address that? Will the Secretary of State undertake to engage with the National Farmers Union of Scotland, the Scotch Whisky Association and other representatives of industry in Scotland to ensure that this problem is tackled head-on?

I agree: this is one of the principal issues that we have to address. Whether it is on farming, textiles or whisky, what is going on in the rest of the world and other countries’ relationship to the US have a direct impact, even though that does not relate directly to the conversation about tariffs and our own trade deal with the US. I am meeting the chair and chief executive of the Trade Remedies Authority imminently. This is a crucial part of the work that we have to get right. We have some measures in place for steel and aluminium, but we have to ensure that we are ready for other sectors of the economy, too.

Many of my constituents work at Jaguar Land Rover or in the motor manufacturing supply chain, and they are really concerned about 25% tariffs on exports to the US. Can the Secretary of State set out what steps he is taking to get those tariffs reduced and to support west midlands businesses before I meet Jaguar Land Rover later today? Does he agree that a calm and measured approach is exactly what is needed to get the best deal for British businesses?

JLR is an example of an incredible UK-based business in terms of its success in the US, China and other parts of the world. We want to maintain that and give that business the platform it needs for that success. I am in regular contact at the most senior levels with JLR. I am delighted to hear that my hon. Friend is meeting it today to share some of these messages of reassurance. I know that, like all businesses, it supports this calm, pragmatic, rational approach to finding a better trade relationship with the US, not just to avoid the imposition of what was announced yesterday evening.

The previous Government undertook secretive trade negotiations with the USA that included health. Will the Secretary of State assure the House that in any bilateral discussions with the USA, there will be no question of US private healthcare interests coming into Britain to undermine our national health service or, indeed, take over sections of it?

The right hon. Gentleman knows that I do not comment on the detail of talks, but I can tell him that there have been no discussions in relation to the NHS or anything that would concern him in that regard. This is about goods and services and how we recognise each other’s standards. There is nothing relating to the health sector that I have been able to talk about with US counterparts. I hope he finds that reassuring.

The automotive industry is incredibly important for workers in Milton Keynes, with many headquarters based there, such as Volkswagen’s. I realise that these tariffs will be incredibly difficult for the automotive sector, and it is good to hear what the Secretary of State said about looking for a pragmatic approach to the ZEV mandate. What else will he be doing to support the automotive industry here in the UK?

I thank my hon. Friend for his support. He has some tremendous businesses based in his area, and it is great having him here as a champion for them. In terms of the automotive sector, it is about the regulatory environment, which we have discussed, and it is about the funding that we make available for co-investment with the private sector, which is always a priority, and £2 billion was allocated for that in the Budget. We have to accelerate and improve our electric vehicle charging infrastructure, and there was £300 million for that in the Budget. The pressures on the automotive sector across Europe are fierce—that is widely recognised—with changes in consumer demand and much more competition from China coming into the market. We have to be serious about making sure that the UK is the place to be a producer of automotive vehicles. My personal commitment to that is very strong.

I thank the Secretary of State for his responses so far on Northern Ireland. I trust that he will continue to engage with my colleagues in the Northern Ireland Executive in the days ahead. However, he has not been able to allay my fears about the possible inclusion of online safety in any US deal. Can he reassure me and the Molly Rose Foundation that no more young lives will be sacrificed in order to try to get a deal with the US?

As I said, I updated the First Minister and Deputy First Minister yesterday. It is a particular situation that we need to remain very much aligned to, making sure the system is working as it should, difficult as that will be. The hon. Lady knows that I will not go into the specific negotiations on any part of a deal, but I say seriously to any colleague that their concerns are misplaced if they think this is what the negotiation is about. It is about goods and services and regulation, and that is what we are focused on delivering.

The Prime Minister has rightly said that this Labour Government will always work in the national interest, so can the Secretary of State assure the House that it is in our national interest to protect the copyright of our creative industries and the £126 billion of economic power they bring to Great Britain?

The creative industries are not just a wonderful cultural asset to the UK but a tremendous economic asset as well. I do not necessarily agree with the commentary in parts of the media that posits a tension between being a creative powerhouse and supporting the tech sector. There is a way through that, and that is what my work in government seeks to achieve. I think we all recognise the economic impact on the UK of our creative sector, the cultural soft power that comes from it and the huge asset it represents. That is always first and foremost in our thoughts.

It is estimated that 25,000 jobs directly linked to the automotive sector are at risk due to reduced exports to the United States. That is a deep concern to many of my constituents who work at either JLR in Solihull or Aston Martin in Gaydon. Can the Secretary of State set out what specific steps he is taking to protect those jobs, and whether it will involve reforming the regulatory environment in which they operate?

I have seen the Institute for Public Policy Research report that contains that figure. Because the automotive sector is such a jewel in our crown, we are all aware of what would happen if we were not able to find a way through this. Our work to find that deal and remove this threat of tariffs is intended precisely to deliver that way through. I met Aston Martin yesterday, as an example of the work we are trying to do. The hon. Gentleman asks a specific question about the regulatory environment we inherited. I cannot pre-empt the publication of the consultation, which has just finished, but he will be aware of comments I have made publicly about changing that to reflect different circumstances. He will not have to wait long for the outcome to be published, and I can tell him that the Secretary of State for Transport, the Secretary of State for Energy Security and Net Zero and I are aligned on ensuring that we get the regulatory environment correct for the future.

I thank the Secretary of State and his colleagues for the practical and pragmatic approach they have taken to put us in the best possible position with the US. Does he agree that as well as the US, political and economic co-operation with our European friends and neighbours is essential and in our best interests?

It absolutely is, and there is no tension between those two things, as I have said. It is a false choice if people try to present it in that way, and I am particularly looking forward to some of the progress that I hope we will make in our relationship with the European Union. It is looking not to the past but to the future, and of course it is in both our interests to do so.

The US is clearly seeking concessions from the UK, and it has been widely speculated that the UK Government are considering a reduction in the digital services tax as a way of placating Trump and his ally Elon Musk. My hon. Friend the Member for St Albans (Daisy Cooper) asked the Secretary of State this question but I did not quite catch an answer in his response: will he commit today not to cut the digital services tax, as that is the way the tech giants pay their fair share here in the UK?

The hon. Lady has heard me say repeatedly that I will not go into specific negotiations, but ensuring that not just a US tech company but any tech company pays a fair rate of taxation in the UK, for the economic activity that it has in the UK, is something that all parts of the British Government are committed to—she does not need to be worried about that. In any discussion there will always be a lot of issues that need to be dealt with. In the main, those are trade issues. I understand that there are all kinds of speculation, but speculation is not always correct. I ask all colleagues to bear that in mind and understand that we cannot publicly share every single aspect of such a negotiation. If she is worried about US tech companies, or any tech companies, paying the right rate of tax in the UK, let me say that that is something we are deeply committed to.

Does the Secretary of State agree that now is time for unity across the Chamber in the national interest, in contrast to the politicking that we had earlier from the shadow Minister? Will he commit that this Labour Government will always put country first and party second?

Absolutely, country first. I would hope that all Members of the House could get behind the approach we are taking, which is genuinely in the national interest. That is the way forward and the way to deliver what all our constituents want in these troubling times, which is a much better path towards the future.

I appreciate the tone of concern with which the Secretary of State has come here today. I am particularly concerned about what these measures mean for the UK defence industry, particularly companies such as BAE Systems in Fylde and across Lancashire that manufacture component parts for US-UK defence programmes such as the F-35. What conversations has he had with those in the Ministry of Defence about working with their US counterparts to address this issue from a national security perspective, for both the US and the UK? Can he give an assurance that the order of 25 fighter jets that the RAF needs to place will not be used as a bargaining chip in any trade deal, and that British-built Typhoon jets will be used for the RAF?

I thank the hon. Gentleman for his question. I have constituency interests that are similar to his, and the close alignment between ourselves and the US on defence and security matters is an enduring and huge asset to both countries, so I share the sentiments he has raised. He asks whether we can engage US counter- parts in this conversation about a more constructive way forward. Yes, that was always part of our thinking, and our trading bodies in the UK have excellent US links in the main, and they engage in similar activity around that. On his specific point, I have no detail to give him— I have no knowledge of anything like that being used as a bargaining chip, but if I need to give him additional information, I am happy to write to him to provide that.

Bracknell is home to the UK and European headquarters of many US companies, as well as to many UK businesses that do business in America. Can the Secretary of State assure businesses in Bracknell that this Government’s position is that barriers to trade are bad for growth on both sides of the Atlantic, and that he is working hard with a cool head to secure a trade deal?

My hon. Friend is right; Bracknell has some tremendous businesses, such as Honeywell, Dell and 3M, so he will be seeking to promote and defend particular constituency interests. I have had tremendous support for the approach that I have mapped out today not just from UK businesses but from US businesses as well, particularly those with an economic relationship with the UK. Right now people are seeking evidence that countries around the world are trying to deal with this difficult situation in the right way, in their own national interests but also in a way that gives us an opportunity to strengthen rather than weaken those important trading relationships.

It is clear that the UK needs to show some backbone in standing up to the US President’s bullyboy tactics on trade. The Secretary of State says that he is keen to negotiate a deal, but at what cost? What is he putting on the table? Can he assure the House that, in seeking a carve-out from President Trump’s tariffs, he is not prepared to offer President Trump and his big tech billionaire buddies an opportunity to carve up the NHS, our environmental and food standards, or our sovereign right to make our own decisions on taxing digital giants?

The hon. Lady will have heard the answers I have given to some of the questions she raises, and the unequivocal assurances I have been able to provide. She talks about backbone—backbone and strength. Strength and wisdom are not opposing values. Backbone comes from putting our own national interest first, and negotiating on a basis in the interests of all our constituents, not bandying around rhetoric and escalating the situation. That, respectfully, is not the right way forward. The right way forward is to engage on national interest, make sure we are delivering and have the chance to find the right way through this.

I thank the Secretary of State and his team for the enormous amount of hard work they have put in on this issue. It feels apt to mention that I represent the town of Kirkcaldy, the birthplace of Adam Smith, who I am sure would have had something to say about last night’s events. My right hon. Friend is keenly aware of the importance of the US market for Scottish exports, including but not limited to salmon and whisky, which I know he is very fond of. What further reassurance can he offer to Scotland’s leading export industries about the impact of these developments on trade with the US?

I am tremendously grateful for my hon. Friend’s support and for her question—Adam Smith is probably the best historical reference we have had in this statement so far. As she knows, I have always aspired for my Department to be one of the most pro-Scottish UK ministries, because of the interests that we are there to defend and promote. She will also know that this week is Tartan Week in the US. The Secretary of State for Scotland is in the US right now, and I admire the way that he has turned the Scottland Office into such an economically focused Department, working with Scottish businesses, and working closely with me. That is a tremendous initiative, and one that we will continue to promote.

Trump’s tariffs will make everyone poorer and are extremely disappointing, so is it noteworthy that Reform Members have not bothered to turn up to share in our disappointment? Our automative sector is already announcing closures and layoffs, including Stellantis in Luton, which has provided great jobs for my constituents for many years. In his review of the regulatory environment in response to these tariffs, will the Secretary of State ensure that it will be easier, not harder, to create jobs in the UK in future?

I thank the hon. Gentleman for that question, and he is right to note some conspicuous absences from the Chamber on such an important subject. I could not make it clearer: I care a great deal not just about the transition to new technologies in the automotive sector, but about ensuring that we make those vehicles in the UK. We face tremendous competitive pressures, as he will know from the stories his constituents tell him. We must be alert to that and willing to be adaptable, to ensure that we are a place where vehicles can be made. We have some tremendous industries. If we chart the productivity and efficiency of some of our plants on a global scale, we see that are at the top end. We must get that policy and regulatory environment right, and I give the hon. Gentleman a total assurance that that is my personal objective.

I thank my right hon. Friend for his statement and for all the work that he has done so far in negotiating an economic partnership with the United States. He will appreciate that the lower levy applied to the UK will be of cold comfort to my constituents, who will see their bills rise. Can he assure me that he will resist calls for a knee-jerk reaction to this? The escalation of a trade war will not help anybody, and the way we achieve a negotiated settlement is through constructive dialogue and a calm approach—I say that as somebody who spent 20-odd years as a negotiator prior to entering this House.

My hon. Friend is a formidable negotiator, as I have seen at first hand—we might see if she is available for some of the work we have to do. She is right that this is about delivering for our constituents, who must be concerned when something of this magnitude has been announced. No one in Government or in any part of the Chamber is relaxed about the relatively better position we find ourselves in, because it is still something that we have to find a way through. We must keep all options on the table—that is behind some of the announcements I made in the statement—but the approach that my hon. Friend advocates and promotes is my approach, and I thank her for her support.

I watched the Secretary of State on television this morning, and I thank him for his calm, collected and carefully chosen words. He understands my real concerns about Northern Ireland businesses—my stomach is doing somersaults worrying about the impact for Northern Ireland. My party leader, my right hon. Friend the Member for Belfast East (Gavin Robinson), made a point at Prime Minister’s questions that still stands: Northern Ireland remains exposed to potential EU retaliation, and local businesses must not become collateral damage. The Government must take urgent steps to protect Northern Ireland interests and to ensure that our place in the United Kingdom internal market is fully safeguarded. In his reply to my right hon. Friend yesterday, the Prime Minister kindly committed to act in our national interest, so will the Secretary of State outline for the record what steps will be taken to do just that?

I thank the hon. Gentleman for his question and for his kind words. It has been quite a week so far, and we still have some way to go. This is an issue not just for Northern Ireland Members, but for all Members of the House. We have to be alert to the particular situation that would occur if there were a different retaliatory stance from us and the EU. That is why I briefed the First Minister, the Deputy First Minister and my counterpart yesterday. The shadow Minister was right that the issues around the duty reimbursement scheme are key. On the formal steps that we have taken, businesses can now input their concerns and what the tariffs will mean to them directly to Government. We need to work together, particularly in relation to Northern Ireland, to ensure that specific voice and that specific question are a key part of how we look at the issue and respond. I am keen to work with the hon. Gentleman in that regard.

May I echo the thanks to the Secretary of State and the Prime Minister for the calm and effective way that they are dealing with the United States? Unlike some of the frivolous comments we have heard from Conservative Members, does my right hon. Friend agree that the US’s 20% tariff on EU goods is to be deeply regretted, as it could indirectly affect the many UK businesses that supply components to EU manufacturers that export to the US, particularly in the automotive, aerospace and pharmaceutical sectors? What discussions has he had with European counterparts about the US decision? How he will represent our concerns to them in the coming days, if there is an escalation of tariffs?

My hon. Friend is right that our concerns have to be not just about what this means for our own relationship with the United States, but about the second-order impact on the UK from the trading relationship changes between the US and other key allies and markets. No discussion on trade or tariffs is complete without bringing up rules of origin. The complexities of some of the supply chains, particularly in the automotive industry, are key issues; we have to ensure that we have preferential tariff access to markets and that the products we make in our country qualify for those under the rules of origin. We are closely engaged with all partners. He will know that the Minister for the Cabinet Office, my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds), deals with the EU reset, but we will continue to have a very close working relationship, as well as having direct conversations with our European Commission counterparts.

In answers to questions so far, the Secretary of State seems to have dismissed the threat of the US trade negotiations to the safety of our children. I am sure he has seen the abandonment of content moderation on social media platforms and heard what Trump, J. D. Vance and Musk have said about free speech in our country: what they mean is the freedom of US social media giants to keep our children addicted to their platforms, no matter how harmful the content. I know the Secretary of State says that he does not want to get into the specifics of the negotiations, but is the Online Safety Act 2023 part of those negotiations, or will he take the opportunity to rule that out?

I want to be clear with colleagues, not to invent problems that do not exist. I am aware of comments that have been made about freedom of speech in the UK. They have not been part of the trade negotiations. The hon. Gentleman recognises that I cannot share details of negotiations, but then he asks me to share those details. He knows that I am not going to do that because it would not be in our national interest. However, I say to colleagues that these negotiations are about goods and services in the main. It is important to focus on that—let us not make this more difficult than it is.

West Bromwich is a metal industry heartland. We are home to the Confederation of British Metalforming and many brilliant exporting businesses are in the automotive steel and aluminium supply chain. This morning, I spoke to the chief executive of William King, one of those brilliant local businesses, and she was clear that the Government are right to remain calm and to work to do the deal. While Ministers are working towards that deal, what else can we do to support those businesses to continue to trade and invest with confidence?

That is the right approach to take. I welcome my hon. Friend’s support and that of the businesses in her constituency that she mentioned. Of course we are trying to find a way through this, but given the situation we inherited after the election, our domestic competitiveness is not what it could be and what it needs to be. Even Conservative Members recognise the impact of aspects of regulation, energy prices and the direction of travel. The output of foundation industries last year and this year is at levels that should concern us all. We have to get that right, which is why this Government are committed to an industrial strategy and a trade strategy that works in partnership with it. As well as endorsing our approach, the feedback from businesses is that that is exactly what they want. West Bromwich is a powerhouse, but I want it to be an even bigger powerhouse in the future, and the same applies to the constituencies of many Members across the House.

The tariffs announced by Trump last night will be concerning for many businesses in the UK, not least British farmers, including in my constituency of Stratford-on-Avon. We all recognise that Trump will use the imposition of tariffs to try to get concessions from countries around the world. Will the Business Secretary reassure the whole country and commit today that he will not agree to any deal with the US that would lower food standards and undermine British farmers?

The hon. Lady will have heard me say very clearly that we are committed to the sanitary and phytosanitary regime, as set out in the Labour manifesto. The UK is currently the biggest importer in Europe of US agriculture, so we should not present this as something that we do not already have that the US is trying to open up. We have a strong, mutually beneficial relationship. British agricultural products are premium products that have a tremendous reputation, whether in the US or in other parts of the world. Seeking to remove trade barriers on both sides, while maintaining the SPS regime in UK, which is very important to our other trading relationships, is vital, but that could be a positive story of how we open up more markets to excellent US products. That is fundamentally what good trade policy is about.

I thank the Secretary of State for coming to the House and for his calm head in a difficult situation. My constituency is home to many businesses, including Wright’s Flour, A1 Bacon, Harlow Group and Raytheon, that trade directly and indirectly with the US. What reassurance can the Secretary of State give to those businesses and their consumers? Does he think that Raytheon’s work sourcing UK parts for its defence systems will be increasingly vital in the months and years to come?

I am grateful to my hon. Friend for his support and for mentioning some of the excellent local businesses in his area. On the impact of the pandemic and the war in Ukraine on supply chains, the private sector has been working with Government to look at vulnerabilities to ensure we do not have strategic weaknesses. We intend to include that vital work in the trade strategy, which is due to be published imminently, but that aspect of economic security is extremely important.

The Secretary of State cannot have failed to notice the number of Members from all parties who have raised the food and drink industry, particularly in Scotland, where many products are made in my constituency. I admire his approach of speaking softly and carrying a big stick as he prepares his plan B, but retaliatory action is not the only lever that we could pull. In discussions with the Chancellor, would he be prepared to offer some sort of mitigation to businesses in the food and drink industry in the autumn statement?

The hon. Gentleman has skilfully raised issues relevant to the autumn statement that are more for the Chancellor than for me. Products from the food and drink industry form a prominent part of our economic exports. Because of that industry’s success and what it means to the prosperity of every bit of the United Kingdom, it features heavily in all our decisions, whether on trade, business support, export support or the wider regulatory and policy environment. I assure the hon. Gentleman that his constituents and the excellent and successful businesses in his area are always prominent in our thinking.

I thank the Secretary of State for his hard work and for his calm and pragmatic approach. In my constituency of Aylesbury, there are almost 5,000 small and medium-sized businesses, several of which export to the US or have been seeking to do so. Will the Secretary of State set out what he is doing to protect our SMEs in his ongoing negotiations with the Trump Administration?

Fundamentally, I want to see greater market access to the US for small and medium-sized businesses in every part of the UK. We can tackle particular things as part of that, such as the regulatory system in the United States and the federal-state dichotomy, particularly for services and exports. All that is the prize on offer if we get this right. A big part of trade policy is also about not just free trade agreements, even though they tend to get the most prominence, but how we come to agreement on e-commerce and functions of online marketplaces and transactions. All that is a very practical difference that we can make, through good trade policy, to small and medium-sized businesses. That will be a premium and important part of the trade policy we are about to publish.

The pharmaceutical sector appears temporarily to have avoided tariffs, but that may well change. However, medical devices and diagnostics do not appear to have that same exemption. The UK is home to many medtech and diagnostic companies, and the tariffs will have an impact on them both here and abroad and may well push up prices. What conversations is the Secretary of State having with colleagues in the Department of Health and Social Care about ensuring access to medtech and diagnostics in the face of increasing prices?

I thank the hon. Gentleman for his question. He may be aware of the biopharma conference held in the UK yesterday with the top chief executive officers of many of the leading companies in this area. It was attended by myself, the Prime Minister, the Secretary of State for Health and Social Care and the Secretary of State for Science, Innovation and Technology. The hon. Gentleman is right to say that we could see further announcements in this area. There are particular US issues, such as the differential in drug pricing, which has always been a fairly prominent part of trade negotiations. There is an integration and shared aspiration between people in Government, such as myself and the Health Secretary, and recognition of our need to be more forward-leaning, to use more innovation, to look at how we provide that and the relative allocation of resources in our existing health system. We take that very seriously, and we are very much looking at that. There is a lot to do, and it is a difficult situation, but we need more of the success that the hon. Gentleman outlined.

I thank the Secretary of State for his statement. The announcement of a 10% tariff on all products exported from the UK to the United States means that for the second time in just five years, the Scotch whisky industry could be impacted by tariffs in the industry’s largest global market. That will be concerning news across communities where Scotch whisky is a major employer, including in my constituency. Scotch whisky makes up a quarter of all Scottish exports to the US, but it is not one-way traffic; to give just one example, the Scotch whisky industry imports up to $300 million of ex-bourbon casks every year. I urge the Secretary of State to work with the US Administration and ensure that a mutually beneficial resolution can be agreed as soon as possible to support the Scotch whisky industry.

I am incredibly grateful to my hon. Friend for his question and for his accurate insight into some of the co-dependencies and relationships that exist between Scotch whisky and other key international sectors of the food and drink economy. If he ever wants to come and see me in my office in the Old Admiralty Building, I keep a bottle of Lagavulin there, which I think we can all agree is an excellent choice. You would be welcome to come for that conversation at any time, Madam Deputy Speaker. We have to keep the numbers down, but we will look at that if we come through with a deal. [Interruption.] Of course the shadow Secretary of State would also be very welcome to come—what an excellent meeting we have just set up accidentally. Often an equivalence is made in some markets between, for instance, the tariff on bourbon from the US and Scotch whisky. A comparison is made, and those are often seen as competing products, but there is an interdependency as well. The point about the sherry barrels is also really important and fascinating. I can tell my hon. Friend that we are in regular contact with the Scotch Whisky Association, which is tremendously supportive as a resource to us and is very closely engaged with Government. These issues, which are so important to his constituency, are always considered and prominent at the highest levels in Government.

I thank the Secretary of State for his statement and congratulate him on his choice of whisky; that is my favourite as well. There are no winners in this dire situation—we think of the people waking up this morning in Vietnam, Cambodia and so on—but we have to acknowledge that the cool heads in Government have meant, at least for now, as we start this process, that the jobs of people in Edinburgh South West have been saved. I do no doubt that, as we speak, businesses in my constituency and across the UK are trying to figure out what this means for them, so we have to redouble our efforts in our search for growth. I welcome the pragmatic words given around the zero emission vehicle mandate. Ultimately, without compromising our aims, we can work together with businesses and trade unions to get a better outcome, but I wonder if the same approach can be taken elsewhere. The AI regulations that we have been discussing, which I think were mentioned earlier, come to mind. [Interruption.] I will be very quick, Madam Deputy Speaker. There is also HFSS advertising and the sustainable aviation fuel mandate. We do not need to compromise on all those things, but we can work closely with industry to get the right outcome.

I warmly welcome my hon. Friend’s words and his endorsement and seconding of my whisky choice. I should say that other excellent whiskies are available; a lot of Scottish Members are present, and I do not want to offend anyone. He is right to say that businesses will need reassurance: I hope they will get that from the tone that the Government are striking today, but they will need information. If Members get out their phones and go on to great.gov.uk, they will see a link to a bespoke page where that information is provided. We have advertised around that. My hon. Friend makes an important point. Where we can look at alleviating some of the domestic pressures, whether through regulation or other areas, this is clearly the time to do so. I have had those conversations with Cabinet colleagues. He is right to say that this is not about changing policy, but about looking at the impact right now and how we can make a difference. That is a very wise observation to make.

I commend my right hon. Friend for the measured tone he has taken on events in Washington. I want to reflect on the agency we have here in London and with our allies in Brussels. Does the Secretary of State agree that now is the moment to seek the most ambitious trade deal we possibly can with the European Union, seeking deep alignment in goods and services? Furthermore, while the United States may want to make it harder to trade, does he agree that the UK-EU reset provides us with an opportunity to break down the barriers to trade that the Conservatives put up when they were in government? If we get this right, the prize on offer from the UK-EU trade deal could be even greater than what was lost overnight.

I warmly thank my hon. Friend for his question and his support for the approach we are taking. I believe there is a competitive advantage to seek for the UK where we are able to reach agreement with the US. We are able to do those trade deals and negotiations with countries such as India or customs unions such as the Gulf Co-operation Council, and also to get the EU reset right. Although this is not about looking to the past, a lot of smaller businesses stopped exporting entirely after Brexit. They almost certainly set up subsidiaries in the single market, which was not to our advantage, and we saw a real decline in certain types of food and drink trade, even though we had a broadly similar SPS regime in place. We can work on those practical things, and that is our objective. There is real gain to be had from that. We need a partner on the other side who sees the benefits as well, but I believe that they exist, and that is a crucial focus for what we call the twin-track approach to trade under this Government.

I thank the Secretary of State for his statement and for the work he is doing as we face this challenge. I welcome the Government’s commitment to increase defence spending. That is good for not just our national security, but our economy. The sector employs many people in Derbyshire, including at Rolls-Royce. As we seek a trade deal that will create the economic conditions for our public services to thrive and for prices and bills to remain as low as possible, can I encourage the Secretary of State to remind the US of the importance of manufacturers such as Rolls-Royce and the defence sector, and the strategic and economic partnerships they offer us, so that we can work with them more constructively?

Those are very wise words, and I am grateful to my hon. Friend for putting them on the record. Defence spending is crucial for our national security. The big change and uplift that we have seen is a big part of that, but he is right to say that it would be wrong for anyone in this country to think there is not a domestic economic dividend for that. Those jobs are spread all around the United Kingdom, including in places that are really reliant on them, so it is great news on the economic front for all parts of the UK and Derbyshire—Rolls-Royce is a great example of that. My hon. Friend talks about how we can get this right with our relationship to the US. We already have some great things under way. We can think about the AUKUS agreement, in which the US treats domestic UK suppliers as part of the domestic supply chain; there is equivalence there. We can think about steel and the role that Sheffield Forgemasters plays, for instance; that is a crucial part of the defence supply chain for the US. These are really important and mutually beneficial strengths to recognise. If we look at the facts and at how our trade inter- dependencies work, there is a great prize on offer if we get this right.

I call David Pinto-Duschinsky to ask the final question.

Thank you, Madam Deputy Speaker—a joy as ever. I thank my right hon. Friend and the Prime Minister for their tireless efforts, which have secured the best, most powerful position available for our country. Of course, there is deep disappointment that tariffs have been levied, but the fact that they have been levied at the lowest band is a vindication of the Government’s strategy, and businesses I have spoken to—in Hendon and nationally—have been unanimous in their support for the Government’s approach. Does my right hon. Friend agree that the best way to stand up for Britain is through a cool, calm, collected and pragmatic approach, and that we must reject the knee- jerk response and calls for action on invented problems that some Opposition Members demand?

I am extremely grateful to my hon. Friend for his question. He has articulated our approach, which is that we are not complacent or happy; we are disappointed about any tariffs being imposed on the UK. We recognise that the lowest band has been applied to the UK, but that does not mean that we will not redouble our efforts to secure an agreement that offers a way through. I am grateful for the support of my hon. Friend’s constituents. I hear in every part of the country that our approach is genuinely the one that businesses want us to take. It is calm—I am not sure whether it is cool—and, I hope, reassuring to businesses in my hon. Friend’s area. A lot of people are always offering advice in this area. At times, they are offering to escalate a conflict, and perhaps do not have a plan to de-escalate it, but this Government’s approach is always to pursue our national interest, work with partners, and look at the mutual benefits we could get from doing things right. I am extremely grateful for the support for that policy from Members in all parts of the House today.

That marks the end of the very lengthy statement on UK-US trade and tariffs.