China has warned the UK that it “will need to respond” after Keir Starmer‘s trade deal with the US could lead to Chinese products being removed from British supply chains. London and Washington agreed terms to a trade deal last week, the first one signed by Donald Trump‘s administration since the US President introduced a series of “reciprocal tariffs” in April.
Under the deal, the two nations will co-operate on security aspects of their economic relationship. Experts believe this means that the UK and US will try to reduce their economies’ reliance on Chinese money and components, particularly in tech products.
Beijing has warned countries against agreeing trade deals with the US that threaten Chinese interests.
A Chinese government official told the Financial Times that Beijing would not turn a blind eye to the terms of Britain’s new deal with Trump.
“China will need to respond — the UK should not have rushed to agree to the deal,” they said.
The new trade deal saw the US cut levies on UK car and steel exports. However a baseline 10% tariff on British goods remains in place.
The tariff relief for steel and cars comes with strict conditions attached.
These have been granted only on condition that the UK “works to promptly meet US requirements” on supply chain security and the “ownership of relevant production facilities”.
UK officials said the conditions were insisted on by Trump and said that China was the intended target.
The Labour government’s decision to accept the security terms has taken Beijing by surprise.
Since taking office last year, Labour promised a reset in relations with China.
Chancellor Rachel Reeves revived a long-dormant Economic and Financial Dialogue in January.
The Chancellor and her colleague the Foreign Secretary David Lammy have both visited China in recent months.
Both have argued for a stable and balanced relationship with Beijing, saying it could result in as much as £1 billion being added to the UK economy over five years.