The UK has been hit by a fresh 10% US tariff under Donald Trump’s new forced labour regime – but the deal no longer looks world-beating after the European Union secured a better arrangement.
Trump has imposed tariffs of at least 10% on imports from 60 countries, accusing them of failing to prevent goods produced using forced labour from entering the US. “These are tariffs in search of an authority,” one industry figure said, pointing to the president’s repeated shifts in justification – from the opioid crisis to illegal migration to bringing manufacturing back – as he seeks to erect a tariff wall around America.
“US tariffs hit UK at 10% but EU gets better deal; minister insists UK is in 'better place' despite new levies.”
While the UK and the EU each face a headline 10% rate, the EU’s is a flat rate applied across all goods. The UK’s tariff will sit alongside other existing levies, hitting sectors including footwear and textiles. The government has struck effective side deals on medicines, steel, aluminium, cars and, with the help of King Charles, whisky. But the overall trade-weighted effective tariff rate for the EU could end up at 8.5%, slightly lower than the UK’s 6.8%.
“It should not matter that much, but the help given by doing the first deal, and by post-Brexit trade freedoms, looks to have been short-lived,” said Faisal Islam, the BBC’s economics editor. William Bain, trade expert at the British Chambers of Commerce, pointed to the competitive advantage for EU exporters into the US in some sectors. The EU secured better treatment because it has passed a ban on forced labour goods – mirroring US legislation – which the UK has not.
Despite the setback, junior housing minister Sally Jameson insisted the country is “in a better place today” due to certain tariffs on products such as whisky having been removed. Scottish first minister John Swinney said there would be a “significant benefit” for Scottish producers as the 10% tariff on whisky was lifted on Friday.
The question now is whether the UK government will pursue an EU-style ban on forced labour imports, widely seen as a backdoor way to target China over conditions in Xinjiang province. In 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”. Without such legislation, the UK may find its post-Brexit trade freedoms falling short.