Following US president, Donald Trump's announcement yesterday (April 2) of a 10% tariff on all UK exports to the US, the British Chambers of Commerce (BCC) has warned it spells bad news for the UK.

Shevaun Haviland, director general of the BCC, said: "The government has kept a cool head so far and must continue to negotiate. This is a marathon not a sprint, and getting the best deal for the UK is what matters most.

"But no-one will escape the fallout from these decisions. There will be an increased risk of trade diversion, and it will wreak havoc on business communities across the world.

"Orders will drop, prices will rise and global economic demand will be weaker as a result. This is a lose-lose situation for everyone.

"So, it is vitally important that the government does not give up on negotiations. Tariffs can be lifted at any time and the US has signalled its willingness to do some form of deal with us.

"The UK is not without influence; our bilateral trade with the US is worth £300bn, we have £500bn invested there and it has £700bn tied up in our economy. There is a high-level of co-dependency and we are speaking to businesses across the UK on options for government to consider."

The BCC said the government must take its time before deciding how to react to the tariffs and must do what it can to support British businesses.

Shevaun Haviland continued: "There are no winners in the current scenario, negotiations will take time and will inevitably involve compromise. Any decisions on taxes will need to be taken very carefully, and the government must consider all its fiscal options.

"It should keep everything on the table during talks, but retaliatory tariffs should only be a last resort.

"Many firms, especially SMEs, will now be facing difficult decisions and we urge government to do all it can to provide practical support to them.

"We would advise businesses to immediately start negotiations with their US customers on managing the impact of these tariffs - depending on their contracts, there may be deals to be done. In the long-term, exploring replacement markets, especially the EU, CPTPP countries or other trade deals, due to be made later this year, will be options.

"Support may also be available from the British Business Bank's Growth Guarantee scheme, which can offer financial support to firms with cashflow issues."