As punitive tariffs hit UK steel and aluminium exports to the US, the extent of the impact on British firms and communities will be revealed in time. In many respects, British steelmakers and their supply chain firms are collateral damage in Donald Trump’s protectionist push, which has gained momentum in recent weeks. So too are the communities across the UK that depend on the well-paid jobs these companies create.

US on brink of trade war with EU, Canada and Mexico as tit-for-tat tariffs begin Read more

Businesses most exposed to the US market, with key customers and order books on the other side of the Atlantic, now find themselves at the very sharp end. There may be a fair amount of pain ahead, albeit localised, at a time when many trading businesses in the UK are already grappling with the uncertainties surrounding Brexit. So it’s vital the government moves swiftly to demonstrate its support and backing for those caught up in a political conflagration not of their own making.

British ministers and officials have spent months trying to avoid this outcome, working with their counterparts in both Brussels and Washington to try to broker a compromise. Now they must do their utmost to take the heat out of the situation – and avoid further escalation into an out-and-out trade war. Tit-for-tat measures, including those already proposed by the EU, would spread the impact from our industrial estates and factories to our supermarkets, high streets and the wider economy. A return to dialogue and negotiation, with cool heads on all sides, must be prioritised.

Yet the tariffs announced by the Trump administration are also a timely reminder that national self-interest lies at the heart of every trade negotiation. The US president has made no secret of his desire to put “America first”, nor his willingness to take populist decisions that have negative impacts on business interests in his own country and across the world. His latest move once again shows that the US plays tough in trade negotiations – and plays to win.

The 'global Britain' the government seeks to create and the 'America first' approach are the unlikeliest of bedfellows

Trump’s protectionist turn must serve as a wake-up call to those in Westminster keen on a swift free trade agreement with the US once the UK leaves the European Union. The “global Britain” the government seeks to create and the “America first” approach are the unlikeliest of bedfellows. Despite the special relationship between the UK and the US and the deep business and political ties between our two countries, it is unfathomable that the Washington would compromise in negotiations with Westminster if that brought competition that threatened US jobs or investment.

Trade with the US is hugely important to Britain and British companies. Around 15% of UK goods exports already go to the US, the biggest percentage for any single country. As I have written before, while we should seek ways to grow that trade further, a comprehensive free trade agreement between the two should not be a priority unless there is a sea change in the US government’s approach to its partners and friends.

Instead, British ministers must join forces with their colleagues in the EU – while the UK still remains a member – both to de-escalate trade tensions with the US, and to ensure that those firms hurt by its new tariffs are not further undercut as competitors shift away from American markets. The UK has long been a bridge between America and the continent, and must try to use that position to good effect over the coming weeks to avert a trade war that would hit business confidence and investment both here at home and around the world.

While the immediate British casualties of Trump’s steel tariffs may be found in South Yorkshire or South Wales, it is global trade – and the system of rules that underpin it – that could suffer over the longer term. Over the coming weeks, businesses across Britain will want reassurance that their government and its allies will do everything in their power to prevent a global slide into protectionism that would make all of us poorer.

• Adam Marshall is director general of the British Chambers of Commerce