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The UK government has stepped up actions that will help protect businesses and households from some of the economic uproars sparked by President Trump's decision to raise tariffs and overturn global trade norms.
The government said on Sunday it would suspend tariffs on 89 products for about two years to help businesses and consumers save money. Products include construction items such as plywood and plastic, as well as everyday household items such as pasta and fruit juice.
The authorities will also increase exporter financial support by £20 billion ($26 billion) through partial loan guarantees, allowing small businesses to access loans up to £2 million.
The UK government is trying to calm anxiety at home as Trump has raised tariffs on most imports, including those from the UK, and has raised even higher imports on certain goods such as cars and steel. Officials say they want to move quickly to support businesses in an effort to maintain their vulnerable economic momentum.
“This week we witnessed the uncertainty of a changing world,” the president's prime minister, Rachel Reeves, wrote in Sunday's newspaper, Observer. In response, the government “have to stand up to meet in the moment,” she wrote.
Sunday's announcement followed other government interventions recently to enhance protection for businesses affected by tariffs. On April 6, the government relaxed rules regarding the sale of electric vehicles after Trump imposed a 25% tariff on vehicles imported into the US. British officials also expected to relax regulations to speed up timelines for clinical trials to support Trump and the life sciences sector and impose taxes on the pharmaceutical industry.
Also on Saturday, the government ruled from China's owner Gingyi to British Steel, the country's last macrophyto-producing crude steel, to protect jobs and ensure the explosion furnaces continue to operate.
“Our economy is being exposed to global turmoil and supply shocks,” Reeves wrote in his observer column. “We need a strong, smart, and agile state to support key industries and especially the sectors of the economy affected by tariffs.”
As President Trump's trade policy has led to widespread uncertainty, many countries are not waiting to see where tariffs have settled and already in place protections for the economy. Germany, Italy, Portugal and Spain announced more than 50 billion euros of financial support last week in the corporate “Tax Shield.” There are concerns that weak growth in the region could be curbed as consumers and businesses spend and reduce investment.
The UK economy is relatively trade-intensive and vulnerable to external shocks. Its biggest trading partner, the European Union, is struggling to grow its weight in the UK slowly as well. The country's finances are also exposed to global turmoil. For example, as the US Treasury yields rise, it will raise government borrowing costs, as does the UK government's debtors.
Data published last week showed that the economy had risen 0.5% in February. This is an unexpectedly strong rebound driven by increased production power. Analysts said this could have been caused by exporters attempting frontline forecast tariffs, and the economic strength was not sustainable.
Despite strong growth, Pantheon Macroeconomics economists have reduced their UK economic growth forecast to 0.7% this year, forecasting a half of previous forecasts of growth of 0.5% in 2026.
