Trade barriers could reportedly slash the size of the British economy by 1% and lead to tax hikes

The UK is preparing for a new wave of US trade tariffs that could be imposed this week, several media outlets reported on Monday, citing Downing Street.

Few details about the potential tariffs have been made public so far, but they could cut the size of the British economy by 1%, Reuters has reported, citing estimates by Britain's Office for Budget Responsibility. A tax hike is also possible in the fall because of the new trade restrictions, according to The Guardian.

US President Donald Trump is expected to announce the new measures on Wednesday as part of what he calls "Liberation Day." The Trump administration maintains it seeks to slash the $1.2 trillion trade deficit by raising tariffs on global goods and counteracting non-tariff barriers created by other nations.

"We have been actively preparing for all eventualities ahead of the expected announcement from President Trump this week, which (we) would expect the UK to be impacted alongside other countries," a spokesman for the British prime minister, Keir Starmer, told journalists on Monday.

London is currently seeking to strike a trade deal with Washington, which would exempt it from further rounds of trade barriers but the agreement is unlikely to be reached in the coming days, The Guardian reported, citing sources.

"This is an unpredictable situation and an unpredictable administration," a British official told the paper. "We're having to plan for every scenario." People familiar with the matter also told the media outlet that London would not immediately respond to the US tariffs in order not to jeopardize the talks that are expected to continue regardless of any new tariffs imposed.

Talks between London and Washington would "continue at pace this week," Starmer said following a phone call with Trump on Sunday night. The UK prime minister called it a part of "productive negotiations," adding that the sides agreed to "stay in touch" in the coming days.

Last week, Trump announced his plans to introduce a 25% tariff on car imports that would hit British automakers such as Bentley and Aston Martin. A 25% tariff on steel imports that has already been imposed by the US president has prompted the UK's sole remaining producer of virgin steel to consider closing its only remaining plant in the country.

(RT.com)