Britain is still hoping to slash Donald Trump's 10% tariffs on UK goods, says Peter Mandelson - but he warns US President is 'wedded' to his 'baseline' trade levies

Daily Mail​

27-05-2025

Britain is hoping to negotiate down Donald Trump 's 10 per cent 'baseline' tariffs on UK good sold to America, Lord Mandelson said today.
The Labour peer, who is the UK's ambassador to the US, outlined how work is ongoing to 'address' the 'reciprocal' tariffs the US President has imposed.
Earlier this month, Prime Minister Sir Keir Starmer and Mr Trump announced an agreement to provide UK relief to American tariffs on cars and steel.
But a 10 per cent baseline tariff on most UK goods, described by Mr Trump as a 'reciprocal' tariff, still remains in place despite the trade deal.
Lord Mandelson, speaking at an Atlantic Council event, said the UK and US should continue to look at reducing both tariffs and non-tariff barriers where possible.
Yet he admitted that Mr Trump was 'quite wedded' to his 10 per cent baseline levies.
He spoke after the US President backed away from his threat to pose 50 per cent tariffs on imports from the EU next month by pushing a deadline back to 9 July.
Lord Mandelson suggested the UK's own trade agreement with the US should serve as a 'template' for others - including the EU - in avoiding a major trade conflict.
The former cabinet minister also urged Britain and America to work together in order to beat China in a race to harness the potential of AI.
He compared this to the 'Manhattan Project' during the Second World War, when the UK and US collaborated on developing the first nuclear weapons.
Speaking about the recently-signed trade agreement between Sir Keir and Mr Trump, Lord Mandelson said: 'We had to deal with the sectoral tariffs as a priority.
'Because they were the ones that presented a particular threat to industry and jobs in Britain.
'We were facing, unless that deal was done, in the following fortnight a massive loss of jobs in our auto sector in the West Midlands and elsewhere in Britain.
'In our steel sector, and potentially - and I'm glad we've got this prospective protection - on aerospace and pharmaceuticals as well.
'I hope this deal between Britain and the US offers a template for other nations, including the EU, to do its own deal with the US.
'Because none of us wants to see big trading partners - even giants - going head-to-head.'
Under the agreement announced on 8 May, both Britain and the US agreed to continue trade negotiations in a number of areas.
'We need the reciprocal tariffs, which are slightly different from the sectoral ones, we need to address those as well and we've agreed to do so,' Lord Mandelson added.
But, asked to assess the UK's chances of improving the terms of the agreement, he said: 'Let's see, I think the President seems quite wedded to that 10 per cent baseline.
'Within that baseline, I think we can and should look where it is in our mutual advantage to reduce not just the effective tariffs that are operating, but also the non-tariff barriers.
'I think this is a source of great irritation to the President.'
Lord Mandelson noted how Mr Trump's baseline tariffs were 'not exactly unique', as he highlighted how Richard Nixon 'had done exactly in the early 1970s'.
'Another 10 per cent baseline tariff put on trade between the US and its partners,' he added. 'So this is not exactly unique, it's not new - I'm not saying it's welcome.'
Trade experts have suggested the UK-US deal is a step towards excluding China from global supply chains.
And Lord Mandelson said countries in Europe were 'becoming more conscious of the need not to expand or extend our reliance on China'.
'Europe doesn't want to shut out China or decouple from China, but we've got to be much more sceptical,' he added.
'We've got to scrutinise much more carefully key areas where we are overly-dependent on China in our supply chains.'
He insisted, under Sir Keir, that Britain would not be returning to the so-called 'golden era' of relations with China under former PM David Cameron.
Lord Mandelson urged the UK and US to work together on AI, as he outlined a vision of Britain as 'an AI-driven new model economy for the 21st century'.
'I believe we have to do that with American technology, capital and talent to add to our own. We have all those things in plentiful quantity,' he said.
'If we allow China to win this race - and heavens knows they're catching up with every year that passes - if China wins that AI race they will have the key.
'They will be able to do things that cascade down not just in their own country but everyone elses across the world.
'I don't want to see a world in which China has got the key to AI, where it's able to use that key to open up so many other areas of technological advance.
'Their values, their principles, how they conduct themselves is not right for the sort of world we want to live in and create.
'That's why I think we have to band together, just as we did in the Manhattan Project.
'That was an extraordinary collaboration between two great science-rich nations - our own and the US.
'What goes for the Manhattan Project now needs to go for so many other sectors of technological advance.
'Where we can create huge new sources of improvement in the lives of our people and of humanity.'
As well as the trade agreement with the US, Sir Keir has also recently signed a Brexit 'reset' deal with the EU.
Critics have blasted the agreement for tying the UK much closer to Brussels' rules.
But Lord Mandelson, a former EU commissioner, said: 'There's no point in disaligning ourselves from EU rules and standards where we are operating in Britain those rules and standards in order to export into the European single market.
'Why make a fetish of disalignment when we know that it's in the interests of our businesses and traders to follow those rules and standards?'
Yet Lord Mandelson admitted there were 'other areas' - such as on data protection and AI - where the UK should 'follow a more independent regulatory pathway'.