Starmer calls for ‘calm’ as US tariff war flares up
Sir Keir Starmer urged US and EU allies to engage in “calm discussion” in order to stave off a tariff war while re-iterating the UK’s commitment to upholding Greenland’s sovereignty.
President Trump stunned allies by threatening to impose additional 10 per cent tariffs on UK imports from next month due to opposition to his plans to take over Greenland, with the Prime Minister telling Trump in a call on Sunday evening that tariff threats were “completely wrong”.
While the EU is preparing an £80bn retaliatory tariff package on the US, Starmer has called for allies to “find a way forward” and “avoid a tariff war” that risks putting the UK economy under strain.
In an emergency press conference at Downing Street on Monday morning, the PM said maintaining ties with the US was essential to reducing the cost of living, the nuclear deterrent and British businesses.
He warned that US tariffs would inflict “huge damage” on workers across the UK while hard threats against Greenland could weaken Nato.
“The use of tariffs against allies is completely wrong,” Starmer said. “A trade war is in nobody’s interests.”
“There is a principle here that cannot be set aside because it goes to the heart of how stable and trusted international cooperation works,” he added while defending the norms of international law for “predictable” and “practical” policymaking.
Starmer also said he did not believe Trump would take military action to annex Greenland, adding that he was hopeful the economic war could be resolved through negotiations.
His comment came despite Trump’s note to the Norwegian prime minister stating that he can “no longer feel an obligation to think purely of peace” after losing the Nobel prize last year.
Starmer ‘stands by’ defence spending plans
President Trump is expected to attend the World Economic Forum’s Davos conference this week with senior officials from his administration.
Starmer is not currently scheduled to travel to Switzerland, CityAM understands, although plans could be adjusted to allow for face-to-face meetings to take place.
Chancellor Rachel Reeves is meanwhile set to attend the conference. Her speech at the London Stock Exchange to hail a “new era” for retail trading in the City was cancelled as she sat in the front row for Starmer’s press conference.
The Labour government is set to face more questions on its military capabilities after the chief of defence staff warned there was a shortfall in funding to carry out recommendations in a key review of the armed forces published last year.
When questioned on whether he was prepared to hike defence spending at a faster pace, Starmer said: “We’ve obviously set our plans for this parliament and we made commitments at the Nato summit in relation to going beyond that. We stand by them.”
The Prime Minister called on European nations to spend more on defence and collaborate more closely with the UK, though he rejected suggestions that he would have to choose between Washington and Brussels.
Reform and Tories condemn Trump
Both Reform and Tory figures have joined Starmer in condemning Trump’s tariff threats, with the likes of Nigel Farage and Kemi Badenoch claiming the US president is wrong to re-ignite trade threats.
Farage has made a break from his usually friendly stance on Trump, telling GB News that the tariffs are “wrong, bad and very very hurtful”.
The Reform leader added: “I will be having some words with the US administration on Wednesday when I am in Davos.”
Analysis from Capital Economics has suggested that the “existing pain” on UK carmakers and pharmaceutical manufacturers would be worsened by 10 per cent tariffs coming into effect next month.
Up to 0.75 per cent of UK GDP could be stripped in the long-term, equivalent to several billion pounds, if Trump’s tariffs came into effect.
One consequence could be that “the UK is nudged closer to the EU”, according to economists at the consultancy.
Peel Hunt economist Kallum Pickering said: “Tariffs are decidedly anti-growth and can add to inflation, while escalating geopolitical risks sow uncertainty.
“Although Europe is badly politically fragmented and economically impaired, it nevertheless remains a massive economy and could inflict economic pain upon the US.”
Pickering also noted that a pending decision by the Supreme Court on the legality of Trump’s tariffs, which is expected this week, should be closely watched by economists and investors while Republicans’ willingness to back Democrats in containing Trump could also be pivotal ahead of US mid-term elections this year.