The Trump administration has imposed new tariffs on imports from 60 countries, including the UK, over alleged forced labour in supply chains, but the UK has emerged in a weaker position than its European neighbours.
The tariffs, set at a minimum of 10%, are based on claims that goods were produced using forced labour. The move has been described by one industry figure as “tariffs in search of an authority”, designed to shield President Trump’s trade levies from challenges by Congress or the courts.
“US tariffs on UK remain unchanged, but EU now has lower effective rate due to forced labour ban.”
While both the UK and the European Union face a headline rate of 10%, the EU’s tariff is a flat rate, whereas the UK’s will apply alongside other tariffs on a range of goods including footwear and textiles. As a result, the overall trade-weighted effective tariff rate for the EU is estimated at 8.5%, compared with 6.8% for the UK — meaning EU exporters to the US now have a cost advantage in certain sectors.
“This is not an accusation on the use of forced labour in supply chains,” the BBC’s economics editor Faisal Islam wrote. “It is about the passing of specific legislation, mirroring the US ban on products that have used forced labour in supply chains.”
The UK has not passed such a ban, while the EU has, securing better treatment from Washington. The British Chambers of Commerce trade expert William Bain pointed to the competitive advantage this gives EU exporters into the US in some sectors.
The UK government has struck side deals on medicines, steel, aluminium, cars and, with the help of King Charles, whisky. But the initial benefits of being first to negotiate with the US and of post-Brexit trade freedoms now appear short-lived.
Last October, the government said it “remained firmly opposed to the use of state-imposed forced labour” but was “considering how best to reflect this position”. The absence of legislation raises the question of whether the UK will now pursue an EU-style ban, widely seen as a backdoor way to target China, particularly over conditions in its Xinjiang province.
The forced labour justification marks the latest in a series of shifting rationales for Trump’s tariffs, which have ranged from the opioid crisis to illegal migration and reshoring manufacturing. Some previous rounds were overturned by courts, economics or their own logic. Now, with the UK facing a competitive disadvantage compared with the EU, the pressure is on the government to act.