Swinney demands ‘big and bold response’ from UK Government to Trump’s tariffs

Scotland’s First Minister has demanded a “big and a bold response” from the UK Government to Donald Trump’s new tariffs.

John Swinney warned businesses were facing a “double whammy” with tariffs now applying on sales to the US while businesses are having to pay out more after the UK Government hiked national insurance charges for employers.

Stressing that the “economic landscape has changed dramatically” following the US President’s announcement of a new tariffs regime last week, the SNP leader called on Chancellor Rachel Reeves to rewrite her fiscal rules.

In addition he also urged the UK Government to reverse the increase in employer national insurance contributions, which came in on Sunday.

Speaking while in New York to promote Scottish business as part of the city’s Tartan Week celebrations, Mr Swinney said there was now a “huge amount of debate and volatility around the imposition of the tariffs regime last week”.

He added: “I recognise the seriousness of this and the damage that could be done by that approach.”

While he stressed his discussions with businesses in the US had given him a “great deal of encouragement and confidence about Scotland’s attractiveness” to investors, Mr Swinney stated that the global outlook is “challenging” for trade.

He told the PA news agency: “The economic landscape has changed dramatically by the tariff announcement last week, and it needs to have a big and a bold response from the UK Government, who control macroeconomic policy and international trade.

“Companies in Scotland are facing a double whammy of tariffs in relation to the United States and the economic implications of those tariffs, alongside a significant rise to business costs through employers’ national insurance contributions.”

Adding that the situation now is “very different to the economic landscape that was expected by the UK Government”, he said in response that “the UK Government has got to change and change boldly the approach that it has taken”.

Calling for action from Ms Reeves, the First Minister said: “The Chancellor has got to change her fiscal rules, because her fiscal rules were written at a time that did not foresee the type of economic damage that will come from tariffs.”

He went on to claim that the fiscal rules currently applied by the Chancellor are “completely serving us ill in the current context, because the tariffs put a huge obstacle in the way of business activity from Scotland”.

While the US President hailed the imposition of global tariffs as “liberation day” for America, Mr Swinney stated: “The fiscal rules were set for a different context, we’re operating now in a fundamentally different context and that has to be acknowledged by the UK Government.”

The Scottish First Minister continued: “The second thing is that the UK Government has got to reverse the employer national insurance contributions increase, because all they will do is increase the cost of doing business, increase the cost of creating jobs and we need to reduce the cost of creating jobs.

“The UK Government has got to act boldly to address that issue immediately.”

He stressed it was now “absolutely vital that the UK Government acts in the interests of the whole of the United Kingdom”.

With the automotive industry facing steeper tariffs of 25% on vehicles sold to the US, Prime Minister Sir Keir Starmer today promised extra flexibility in the zero emission vehicle mandate as the automotive industry phases out petrol and diesel cars and vans.

But Sir Keir, speaking during a visit to a Jaguar Land Rover plant in the West Midlands, stressed: “This is a moment for cool heads, nobody wins from a trade war.”

Ms Reeves, who accompanied the Prime Minister on Monday’s visit, however showed no sign of moving on her fiscal rules.

While she stressed the UK Government would provide support to those sectors “most exposed to trade shocks”, she also stressed the importance of “doubling down on economic stability”.

Ms Reeves said this was the “basic condition to secure economic growth”, adding: “It is why this Government has stuck to its fiscal rules in the spring statement, even when they were tested, demonstrating that when Britain talks about economic stability, we really mean it.”

The Chancellor said the UK Government would “continue to make the case for free, fair and open trade”, arguing that “is how we will continue to deliver prosperity and security for working people” across the whole country.

And she promised ministers would “go further and faster to capitalise on new opportunities in this changing world”, saying that improving the UK’s competitiveness would leave the country “less exposed to global shocks”.