The UK is prepared for “all eventualities” if Donald Trump slaps import tariffs on goods from Britain, Trade Secretary Jonathan Reynolds said.

The US president-elect has already announced plans to hit China, Canada and Mexico with tariffs as part of his efforts to crack down on illegal immigration and drugs.

But he has indicated he is prepared to use tariffs far more widely as part of his plan to protect American industry.

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Business Secretary Jonathan Reynolds said the UK was ready for all eventualities ahead of Donald Trump’s inauguration (Maja Smiejkowska/PA)

Mr Trump has suggested he wants to increase tariffs on goods imported from around the world by 10% or 20%, rising to 60% on items from China.

The UK could retaliate in the form of tariffs targeted at symbolically important US products such as whiskey, blue jeans and motorbikes – hitting brands like Jack Daniel’s, Levi’s and Harley-Davidson – as Britain and the European Union did during trade wars in Mr Trump’s first term in the White House.

Mr Reynolds would not be drawn on what actions he would take but insisted the UK was prepared.

He told the Commons Business and Trade Committee: “This is the big question facing global trading relationships.”

The UK should be an advocate for “open, transparent, free trading relationships around the world”, he said.

“Yes, it’s true to say, if any country imposed tariffs on UK companies exporting, it would hurt our companies.

“But let’s also remember that it also hurts the consumers in whatever country are being asked to pay those tariffs. And there’s an inflationary pressure, there’s an impact on the cost of living.”

The Cabinet minister acknowledged that a 20% tariffs on goods exported to the US would result in a “not insignificant” impact on UK economic growth.

Asked if the Government had options ready to respond to tariffs from Mr Trump, the minister said: “I wouldn’t want to speculate, but the committee should assume that all eventualities have been prepared for.”

The options in any dispute would be to do nothing, retaliate or negotiate.

Asked if retaliatory tariffs on goods such as Harley-Davidson bikes were already prepared, the Trade Secretary said: “You would expect this department to prepare for every eventuality. But I think we should just be a little bit sensitive at this stage about speculating about how we would respond to something which hasn’t happened.”

Mr Reynolds said the trade deficits with the US in relation to other European countries did not apply to the UK so Mr Trump might not feel the need to act in the same way as he would with other nations.

He said: “There are a whole range of areas where we, as a country, I think could and should – if we could do it – welcome closer trading relationships with the US.

“The US is a fundamental ally of ours. We have an incredibly strong trading relationship as it stands, and when I look to areas like services, technology, critical minerals, if there was the opportunity to work more closely together, I don’t think anyone should turn around immediately and say ‘not interested in that’.”

He acknowledged there were “challenges” in seeking a closer trading relationship, or even a free-trade deal, which would have knock-on impacts with other important markets for the UK in the EU and China.

“I don’t see the need at this stage to rule anything out or in, but to be realistic about where our national interest lies and being frank with the committee about the fact that any negotiation in any major principal market that we might do has to be considered not in isolation, but its relationship to other key markets, and what the consequences of that negotiation would mean for business and trade in those areas.”

But he insisted he did not see the coming years as a “binary choice” between trading more closely with the US or EU.