The British Trade Secretary said that the British government is worried that a "tariff war" between the United States and other countries may lead to increased inflation and unemployment.

Business and Trade Secretary Jonathan Reynolds warned that the UK is particularly vulnerable to US tariffs because it is a "highly globalized economy" that relies on international trade and investment.

During his campaign, Donald Trump promised a sweeping 20% ​​tax on all foreign goods to protect domestic industry, despite warnings that the move would fuel U.S. inflation.

Despite promises from Trump, who takes office on Monday, British ministers still hope to introduce more limited tariffs targeting specific industries and countries, which may spare Britain. Earlier, Trump dismissed reports that his team was exploring tariff plans that would cover only key imports.

Asked whether he was worried about a tariff war, with countries responding to new US tariffs by introducing their own tariffs, Reynolds said: "I'm worried that because the UK is a very globally oriented economy, the risks to the UK are actually more Even larger than some comparable countries.”

However, he believed Trump was motivated by the US trade deficit with China and the EU, while the UK was "in a different position".

He told Sky News: "We are well prepared for this, we have a good argument and I think actually if we handle it properly there is an opportunity to build a better relationship with some people. "These things have been discussed proposed. But we cannot be complacent – ​​yes, there is a risk of a tariff war. "

Reynolds warned that tariffs could lead to higher inflation and unemployment. "The tariffs are paid by your own people. It's under real pressure in terms of inflation, in terms of employing people and the ability to export to other markets," he said.

He emphasized that the British government has made extensive preparations for tariffs and has been "engaging with the new US administration at the earliest opportunity."

Keir Starmer appointed New Labour-era business secretary and EU trade commissioner Peter Mandelson as Britain's ambassador to Washington and tasked him with negotiating better trading terms with the United States.

Reynolds said the Trump administration was "going to be a challenging time for anyone responsible for trade in a large economy because of some of the promises made during the campaign."

However, he said there were opportunities, including the prospect of closer cooperation with the United States on services technology and digital trade. "If the United States offered to discuss how we could work more closely together on this, we would certainly consider it," he told Sky News.

He believes that the UK is fully capable of becoming a close trading partner of the United States, the European Union, and emerging markets such as India, China, and the Gulf countries.

Asked about the Lib Dems' calls for the UK to rejoin the EU customs union, Reynolds told BBC Breakfast: "The problem with the Lib Dems, frankly, is they only think about Europe.

"Of course it's a major market but this government wants to improve relations with the EU but also wants to work with the US, India, the Gulf. I think the UK can be positioned as the best economy in those major trading blocs."