Trade Negotiations

Lord Lamont of Lerwick Excerpts

Wednesday 14th May 2025 Lords Chamber

[Baroness Jones of Whitchurch (Lab)]

The noble Lord makes a vital point. It is very much an area where we can have shared benefit. The trade strategy is aimed at achieving long-term, sustainable, inclusive and resilient growth throughout trade, supported by a rigorous economic and geopolitical analysis that will set out how we can take some of these issues forward. The noble Lord is right about the contributions that we can make to the US and the contributions that it can make to us. I think that the leaders of both countries understand that we have joint benefits in common, and I am absolutely convinced that we can take these issues forward and make further trade deals on that basis.

[Lord Lamont of Lerwick (Con)]

My Lords, I have two questions for the Minister. First, as my noble friend Lord Sharpe and the noble Lord, Lord Fox, asked, will the new agreement operate with most favoured nation rules, which, as she knows, means that the lowest tariff offered to one country must be offered to all? The reason why I ask whether the agreement is consistent with the MFN rules is because Mr Navarro, the architect of President Trump’s trade policy, as recently as 8 April wrote a very strong article in the Financial Times criticising the MFN rules. The alternative to those rules is, of course, reciprocal tariffs, which Mr Trump has been proselytising, but that would lead to a much more complicated system of international trade, with a huge amount of business bureaucracy, and to commercial chaos throughout the world. I would be very grateful if the Minister could answer that question.

The second question that I would like to ask relates to the 10% basic tariff. The Minister indicated that the Government might want or be able to negotiate further on that. The 10% tariff obviously places businesses in Britain at a disadvantage compared with where they were before, but it is strange that the 10% applies to Britain because the object of American policy is to remove imbalances in the trade system, and Britain had no imbalance in goods, as President Trump acknowledged. The implication seems to be that the 10% is going to apply to all countries throughout the world which, as the Governor of the Bank of England said, is bad news not just for Britain but for the whole world.

[Baroness Jones of Whitchurch (Lab)]

My Lords, I can confirm that we will maintain our status with all the international obligations that we currently have, including with the most favoured status and the WTO. Both of them are very important for our status going forward.

The noble Lord raises the question of the 10% tariff. As we know, the deal removes the 25% tariff on steel, aluminium and autos, but the US has committed to further negotiations, including on the 10% tariffs introduced on 2 April across our economy. We are continuing to negotiate in the interests of key sectors for the UK and, obviously, we will seek the best possible outcomes for those vital parts of the economy and those that are vital to our critical infrastructure. A whole range of negotiations will continue, including on that 10% tariff impact.