The government has accepted Donald Trump’s tariffs will hit the UK economy despite efforts to try and avoid them, but is continuing talks to try and secure an exemption.

Trump is set to unveil sweeping tariffs on goods from around the world on Wednesday, an event the US president has dubbed “liberation day”.

Prime Minister Sir Keir Starmer told a meeting of his Cabinet on Tuesday that “nobody wants to see tariffs,” and he is “keeping all options on the table” when it comes to a response.

The Chancellor Rachel Reeves also told Cabinet that “global tariffs will have an impact on the UK as an open trading economy”, but she said that securing an economic deal with the US could “mitigate some of those effects”.

Reeves spoke to her US counterparts on Monday ahead of the tariffs being announced on Wednesday.

Trump has already announced a 25% import tax will be introduced on all cars imported to the US, a measure which will be a blow to the UK’s automotive industry.

The levy is on top of a series of tariffs set to come into effect on April 2, which could include a general 20% tax on UK products in response to the rate of VAT, which Trump deems to be discriminatory against the US.