Theresa May has called Donald Trump to raise Britain’s “deep concern” over US plans to impose tariffs of 25% on imports of steel and 10% on aluminium.
The prime minister called the president on Sunday after world stock markets tumbled in the face of a threatened trade war with China, and escalating tensions between the US and EU.
“The prime minister raised our deep concern at the president’s forthcoming announcement on steel and aluminium tariffs, noting that multilateral action was the only way to resolve the problem of global overcapacity in all parties’ interests,” said a Downing Street spokeswoman.
Trump’s protectionism has been communicated through Twitter, where he claimed that his country was losing billions of dollars on trade, adding that “trade wars are good, and easy to win”.
The European commission president, Jean-Claude Juncker, responded to the decisions on steel and aluminium by saying Europe was ready to forcefully target US imports such as Harley-Davidson motorbikes, Levi’s jeans and Kentucky bourbon whiskey.
On Saturday, Trump hit back, saying: “If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a tax on their cars which freely pour into the US. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”
May delivered her speech on Brexit amid the tensions, with a focus on the benefits of free trade.
Her call to President Trump came after she made clear that signing up to “passporting” for the City of London after Brexit would leave the UK as “just a rule-taker”, insisting that financial services would instead be covered through a free trade deal.
In comments recorded on Friday after her Mansion House speech, the prime minister admitted the current system that allows banks regulated in Britain to operate freely into other EU countries was off the table.
But she sought to reassure companies that an alternative system would be set up. “My message to them is that what we’re looking to develop is a relationship that means that they can stay here in the UK as part of the City of London, that they will be continuing to provide their services across the European Union,” she told BBC One’s Andrew Marr Show.
The Conservative leader said firms would understand that the sums of money involved and the importance of financial stability meant a deal would be struck “on the basis of recognised regulatory standards”.
But she added: “We can’t just accept rules that are made elsewhere.”
In an interview broadcast on Sunday morning, the prime minister also rebuffed the suggestion that the foreign secretary had raised the spectre of a hard border between Northern Ireland and the Republic in an internal government report.
“No. Boris is absolutely clear that there won’t be a hard border,” she told the BBC’s Andrew Marr, amid reports of tensions between Johnson and Downing Street over claims that May’s chief of staff, Gavin Barwell, leaked the document.
Asked about the controversial paper in which the foreign secretary said it would be “wrong to see the task as maintaining ‘no border’ on the island of Ireland” and said even with a hard border 95% of goods could pass without checks, she challenged the interpretation of his comments.
“He’s clear that there won’t be a hard border between Northern Ireland and Ireland, and we’re working to that,” she said. “We’ve got proposals as to how we can achieve that, now we’re going to be able to sit down and talk with others about how we do that.”
Her comments came as sources admitted there were suspicions that the leak had originated from Downing Street or the Treasury, despite a strong denial from Barwell. They also said the prime minister had blocked Johnson’s plea to publish the full document to place the argument in context.
In the BBC interview, May defended her government’s push for a customs agreement with the EU, after she confirmed that a customs union was fully ruled out.
The government has proposed either a customs partnership or a technological solution, which May claimed would prevent 80% of checks on small companies.
But Simon Coveney, the tánaiste, Ireland’s deputy prime minister, told Marr he was “not sure that the European Union will be able to support” the plan. He said it would be worried about protecting the integrity of the single market.
“While of course we will explore and look at all of the proposed British solutions, they are essentially a starting point in negotiations as opposed to an end point,” he said.
On ITV’s Peston on Sunday, Scottish first minister Nicola Sturgeon said that May should be given credit for “injecting some realism” into the debate by admitting in her speech on Friday that the UK would be worse off after Brexit.
But Sturgeon said May could solve many of these problems by remaining inside the single market and customs union. “Time is running out. The clock is ticking,” she added.