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London – Britain is bracing for potential economic fallout after President Donald Trump announced a new 15% global tariff on all imports over the weekend, a move that has sparked alarm among European officials and raised concerns about the future of transatlantic trade deals. The tariffs, implemented following a Supreme Court ruling striking down a previous attempt at similar levies, are effective immediately, according to a post on Trump’s Truth Social account.
The situation is particularly precarious for the UK, which had previously secured a preferential trade deal with the Trump administration, enjoying a lower reciprocal tariff rate of 10%. Experts now fear that advantage has evaporated, potentially leading to significantly higher duties on UK exports to the United States. This development comes after the US Supreme Court on Friday struck down Trump’s earlier global tariffs policy, prompting the president to react swiftly with the new 15% levy – the legal maximum allowable for 150 days without Congressional approval.
UK Businesses Anticipate Billions in Increased Costs
The British Chambers of Commerce estimates the new tariffs could raise the cost of UK exports to the US by as much as £3 billion ($4 billion), impacting approximately 40,000 British companies. Sam Lowe, a trade specialist at Flint Global in London, stated, “At the moment, we have no clarity on whether the 10% tariff agreed will be honored – but until and unless the US gives a steer, we’ve got to assume it’s 15%.” UK officials are currently engaged in urgent discussions with the US administration, attempting to secure an exemption from the higher rate.
While a previous agreement between the UK and US provided exemptions for key sectors like steel, pharmaceuticals, and automotives, the broader 15% tariff threatens to undermine the benefits of that deal. The economic impact is expected to be uneven, with Britain, Italy, and Singapore predicted to be among the hardest hit, while Brazil, China, and India may spot some benefit, according to Global Trade Alert.
European Union Voices Concerns Over “Tariff Chaos”
The UK is not alone in its apprehension. European officials have reacted with “disbelief and concern” to Trump’s latest policy shift, warning that existing trade agreements could be jeopardized. Bernd Lange, chairman of the European Parliament’s trade committee, described the move as “pure tariff chaos” from the US administration. European Commission President Christine Lagarde cautioned that business relations could suffer from the increased uncertainty.
The new tariffs are being imposed under Section 122 of the 1974 Trade Act, which allows for such levies for a maximum of 150 days unless Congress extends the provision. This temporary nature of the tariffs adds another layer of uncertainty for businesses on both sides of the Atlantic.
Impact on Existing Trade Deals Remains Unclear
The timing of the tariffs raises questions about the future of trade deals signed with the US last year. While ministers expect Britain’s “privileged trading position with the US” to continue, the specifics remain unclear. A government spokesperson stated, “This represents a matter for the US to determine, but we will continue to support UK businesses as further details are announced.”
Despite the concerns, some officials remain optimistic. Kemi Badenoch, a Conservative leader, expressed optimism following the Supreme Court’s decision, noting that “tariffs are expensive for both sides.”
The US has already collected over $133 billion (£98.4bn) from the previously imposed tariffs, and now faces the prospect of potentially refunding that money to importers following the Supreme Court ruling.
The situation remains fluid, and the coming weeks will be critical as both the UK and the EU seek clarity from the US administration regarding the implementation and scope of the new tariffs. The long-term implications for global trade relations are significant, and the potential for further escalation remains a concern.
What comes next will depend on the response from the US Congress and the ongoing negotiations between the UK, the EU, and the Trump administration. Businesses on both sides of the Atlantic are urged to monitor developments closely and prepare for potential disruptions to trade flows.
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