Prime Minister Keir Starmer has issued a direct plea for restraint to the United States and European Union, urging "calm discussion" to avert a damaging tariff war. The call comes after former President Donald Trump stunned the UK by threatening to impose additional 10 per cent tariffs on British imports from next month.
Diplomatic Crisis Over Greenland Sovereignty
The root of the escalating tension lies in Trump's renewed ambitions regarding Greenland. Starmer reiterated the UK's firm commitment to upholding Greenland's sovereignty during a phone call with Trump on Sunday evening. The Prime Minister told the former President that his tariff threats were "completely wrong".
While the European Union is reportedly preparing a massive £80bn retaliatory tariff package targeting US goods, Starmer has taken a more conciliatory public stance. He warned that a full-blown trade conflict would risk putting significant strain on the UK economy and could weaken the NATO alliance through hard threats against Greenland.
"The use of tariffs against allies is completely wrong," Starmer stated during an emergency press conference at Downing Street on Monday morning. "A trade war is in nobody’s interests." He emphasised that maintaining strong ties with the US was essential for reducing the cost of living, upholding the nuclear deterrent, and supporting British businesses.
Economic Warnings and Political Fallout
The potential economic impact of the tariffs is severe. Analysis from Capital Economics suggests up to 0.75 per cent of UK GDP could be stripped away in the long-term, equating to several billion pounds in lost output. Sectors like car manufacturing and pharmaceuticals, already facing challenges, would see existing pain significantly worsened.
In a rare moment of cross-party unity, figures from both the Reform party and the Conservatives have joined Starmer in condemning Trump's actions. Notable critics include Nigel Farage and Kemi Badenoch, who argue the former President is wrong to re-ignite trade threats.
Economists warn the crisis could have unintended geopolitical consequences. Kallum Pickering of Peel Hunt noted that one result might be that "the UK is nudged closer to the EU" as it seeks economic stability. He added that tariffs are "decidedly anti-growth and can add to inflation," while escalating risks create damaging uncertainty for investors.
Defence Spending and International Manoeuvres
The crisis has also sharpened focus on the UK's defence capabilities. Starmer faced questions on whether he would accelerate defence spending after the chief of the defence staff warned of a funding shortfall. The Prime Minister stated his government "stands by" existing spending plans and commitments made at the recent NATO summit to increase expenditure over time.
He called on European nations to spend more on defence and collaborate more closely with Britain, while rejecting suggestions he would have to choose between Washington and Brussels.
All eyes are now on the World Economic Forum in Davos, where Trump is expected this week. While Starmer is not currently scheduled to attend, plans could be adjusted to facilitate face-to-face talks. Chancellor Rachel Reeves is set to attend the conference, having cancelled a major speech at the London Stock Exchange to be present for the Prime Minister's press conference in Downing Street.
The situation remains fluid, with a pending US Supreme Court decision on the legality of Trump's tariffs expected this week. Political analysts suggest that Republicans' willingness to back Democrats in containing Trump could be pivotal, especially with US mid-term elections looming later this year.
