The government needs to “toughen up” and start placing retaliatory tariffs on US carmakers like Tesla, the Liberal Democrats have said.
The party has urged ministers to place a 25 per cent retaliatory tariff on Elon Musk’s electric car company after the US announced that 25 per cent tariffs on all car imports will begin next week.
“I think there’s only one language that Donald Trump understands, and that is the language of strength”, Lib Dem deputy leader Daisy Cooper told BBC Radio 4’s Today programme.
“What we Liberal Democrats are very concerned about is that the government strategy so far seems to be to cower in the corner and just ask Donald Trump to be nice to us and just to hope that he doesn’t do anything nasty.
“That is not a strategy. So we think the government needs to toughen up.
“We think the government needs to start preparing for retaliatory tariffs, and that those tariffs, that preparation, should start by looking at putting tariffs on Tesla cars, because clearly Elon Musk is a huge backer of Donald Trump, and that’s where we would start.”
Cooper also urged the chancellor to rule out tax breaks for US tech barons such as Musk, and scrapping or reducing the digital services tax.
Media reports have suggested that Britain could slash the digital services tax — a levy on big tech companies — in order to stave off US tariffs.
***Politics.co.uk is the UK’s leading digital-only political website. Subscribe to our daily newsletter for all the latest news and analysis.***
The comments came as the chancellor, Rachel Reeves, revealed the government is in discussions with the US about what the new 25 per cent tariffs on imported cars will mean for the automotive sector.
Speaking to Times Radio, Reeves said: “The prime minister went to Washington just a couple of weeks ago and met the US president, and we are now having extensive talks with our counterparts in the US to protect trade between our countries.
“Those conversations will continue.”
She added: “A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined…
“I believe — and we make this case to the United States — that free trade, fair trade, is good for both of our countries, but let’s see where we get to in the next few days.”
During a press conference in the Oval Office on Wednesday, US president Donald Trump announced that cars and light trucks imported into the US would be subject to a 25 per cent tariff.
“What we’re going to be doing is a 25 per cent tariff for all cars that are not made in the United States”, Trump said.
The announcement came after the Office of Budget Responsibility (OBR), the fiscal watchdog, halved the UK’s economic growth forecast from 2 per cent to 1 per cent.
In its economic forecast published on Wednesday, the OBR said the most “severe” scenario, in which the UK and other nations retaliated to the imposition of tariffs, would see GDP 0.6 per cent lower than forecast this year and 1 per cent lower next year.
This scenario would also “almost entirely eliminate” the chancellor’s £9.9 billion headroom against her fiscal rules, the watchdog added. That could force Reeves to return for further spending cuts or tax rises.
Josh Self is Editor of Politics.co.uk, follow him on Bluesky here.
Politics.co.uk is the UK’s leading digital-only political website. Subscribe to our daily newsletter for all the latest news and analysis.
Source: Politics