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After boasting for months about its preferential trade deal with US President Donald Trump, the UK is at risk of becoming the biggest loser in the aftermath of the Supreme Court\u2019s decision to strike down his global tariffs.<\/p>\n
Britain had enjoyed a relatively lower reciprocal tariff rate at 10% compared to other countries \u2014 giving it a competitive advantage \u2014 but Trump\u2019s promise to reimpose them at 15% for all nations means businesses may now face even higher duties. The UK will see the largest increase as a result, followed by Italy and Singapore, according to Global Trade Alert, while Brazil, China and India stand to benefit the most.<\/p>\n
\u201cAt the moment, we have no clarity on whether the 10% tariff agreed will be honoured \u2014 but until and unless the US gives a steer, we\u2019ve got to assume it\u2019s 15%,\u201d said Sam Lowe, a trade specialist at strategic advisory firm Flint Global in London.<\/p>\n
UK officials are now anxiously trying to persuade the US administration to exempt it from the higher rate. The British Chambers of Commerce estimates that it will raise the cost on UK exports to the US by as much as \u00a33 billion ($4 billion) and will impact 40 000 British companies.<\/p>\n
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\u201cWe are having conversations at the highest levels to make sure that what we regard as being in our national interest is heard loud and clear with our American counterparts,\u201d cabinet minister Bridget Phillipson told Sky News on Sunday. She acknowledged the \u201cuncertainty it does cause\u201d for UK businesses.<\/p>\n
Trump\u2019s new tariff regime, imposed under Section 122 of the 1974 Trade Act, can apply for a maximum of 150 days unless Congress extends it. The tariff exemption on steel, pharmaceuticals and automotives \u2014 which was previously agreed between the UK and US \u2014 is expected to remain in place, giving Britain continued preferential status on those key sectors.<\/p>\n
\u201cUnder any scenario, we expect our privileged trading position with the US to continue,\u201d a government spokesperson said.<\/p>\n
Still, businesses exporting other products to the US \u2014 from scotch whisky to toys \u2014 will \u201cnow face a higher tariff, equivalent to what the EU was facing before,\u201d said Crawford Falconer, Britain\u2019s former top trade negotiator. \u201cIt would appear on face of it that Australia and the UK have been most negatively affected: there will be a desire to get clarity and indeed get it lowered.\u201d Australia was also subject to the 10% rate before the Supreme Court ruling.<\/p>\n
The UK has already expended significant diplomatic capital to extract preferential treatment from the White House. And last month, Prime Minister Keir Starmer helped persuade Trump to walk back his threat to impose higher tariffs on Europe in retaliation for the continent\u2019s support for Denmark and Greenland.<\/p>\n
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The so-called \u201cspecial relationship\u201d between the two nations was strained further last week when Trump lashed out against the UK\u2019s deal to hand over sovereignty of the Chagos Islands to Mauritius. That appeared again in retaliation for Britain holding off on giving him permission to use the archipelago\u2019s Diego Garcia military base for a possible strike on Iran.<\/p>\n
Trump and his team are also likely to be distracted by the setback to the tariff regime, which due to lower rates now set to apply to countries like India and Indonesia, means the US has \u201clost quite a bit of tariff revenue,\u201d said Falconer.<\/p>\n
\u201cThey will be spending the next five months finding other ways to plug the gaps,\u201d Falconer said. \u201cTo try to get time with the US to fix the UK\u2019s particular problem will be rather difficult.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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