The UK government is taking the right approach to tariff negotiations with the US despite downgrades to the economic outlook, says the British Chambers of Commerce (BCC). The International Monetary Fund (IMF) has cut its growth forecast for global GDP to 2.8% from 3.3% this year.
The IMF predicts that the increase in tariffs and uncertainty will lead to a significant slowdown in global growth. US growth is now expected to be 1.8% this year, down from the IMF’s estimate of 2.7% for the US in January. The forecast for the UK has also been cut from 1.6% to 1.1%.
William Bain, Head of Trade Policy at the BCC, said:
‘The downgrades for both the UK and global economy should come as no surprise to anyone.
‘Firms were already facing into a wall of higher domestic costs, including the national insurance rise, before the US unleashed its explosive tariff proposals.
‘But there is strong support for the government’s approach to continue negotiation and not immediately retaliate. The US has been open to talks and the signals that a deal can be reached are promising.
‘But talk of recession remains premature, it is by no means certain. The government must do all it can to boost business confidence by providing practical support around infrastructure projects, reforming business rates and cutting red tape in the right areas.’
Reference: BCC Website IMF Website
