UK firms face a nervous wait ahead of the scheduled imposition on 15% on import tariffs to the US
The UK risks being hit among the hardest by Donald Trump’s knee jerk 15% import tariffs.
The US President’s sudden announcement of fresh tariffs in respond to a Supreme Court ruling late last week risking throwing a deal struck by PM Keir Starmer into doubt. The 15% levy was due to come into force from Tuesday.
The blow to exporters comes just as experts think there are glimmers of hope for the UK economy this year.
Andy Haldane, president of the British Chambers of Commerce, said its member companies would “most likely be worse off” from the tariff changes. I think the UK has borne a disproportionate amount of the burden of this so far,” he went on. In general, we were at 10%. If he (Trump) follows through, that will be 15% and that means the UK will be towards the bottom of the league table in terms of who has been made worst off by the measures over the weekend.”
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The threat to UK firms comes despite Sir Keir having previously won a hard fought deal over tariffs with Trump.
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“The perversity of what happened over the weekend is that those who had got good deals – the allies – have been most disadvantaged,” said Mr Haldane, a former chief economist at the Bank of England, as he urged ministers to seek clarifications from the Trump administration.
Downing Street warned “nothing is off the table” if Trump goes ahead with the 15% tax on UK imports to the States. A spokesperson hinted that hitting back with levies of its own on US goods was an option is the issue could not be resolved. “Nothing is off the table at this stage,” they said, but added: “Industry doesn’t want to see a trade war.”
Business Secretary Peter Kyle spoke to US counterpart Jamieson Greer over the weekend to urge the administration to honour the US-UK deal that was hammered out. Mr Greer appeared to give hope that UK could dodge the higher 15% tariff, after he told US TV: “We expect to stand by them.”
Reports say a 10% tariff on UK-made cars imported to the US will remain in place, whatever happens.
But writing on the platform Truth Social, Trump said: “Any Country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to.”
James Mills, head of trade policy at trade policy Logistics UK, said: “The US is the UK’s largest single-country trading partner and accounts for around one sixth of all UK exports, so any changes to tariff arrangements matter significantly for British businesses.
“Companies now need urgent clarity on how the proposed 15% levy will apply in practice and confirmation that previously agreed sector arrangements will be honoured. Exports to the United States support nearly one million UK jobs, making stability in this relationship vital. In a more volatile global environment, trade-led growth depends on predictability and on keeping trade as open, efficient and frictionless as possible, because the UK grows when it trades.”
Richard Rumbelow, director of international business at manufacturers’ body Make UK said: “Many UK exporters will be concerned at the further prospect of trade disruption to goods entering the US market.”