Britain’s post-Brexit trade victory with the US has turned sour after Donald Trump’s new tariffs on 60 countries left the UK with a worse deal than the European Union, despite early hopes of a world-beating agreement.
The Trump administration imposed a fresh 10% import tariff on British goods, claiming they were produced using forced labour – a justification one industry figure described as “tariffs in search of an authority”. The move follows the expiry of time-limited levies introduced after a Supreme Court defeat.
“US new tariffs leave UK with worse deal than EU, despite side deals on whisky and steel.”
While the UK and EU each face a headline 10% rate, the EU’s is a flat tariff, whereas Britain’s will apply alongside other duties on a range of goods including footwear and textiles. The overall trade-weighted effective tariff rate for the EU is 8.5%, compared with 6.8% for the UK – but the EU now enjoys a competitive advantage in some sectors, according to William Bain, trade expert at the British Chambers of Commerce.
The UK government has struck side deals on medicines, steel, aluminium, cars and, with help from King Charles, whisky. However, the advantage gained by doing the first deal and by post-Brexit trade freedoms “looks to have been short-lived”, according to BBC economics editor Faisal Islam.
Junior housing minister Sally Jameson insisted the UK was “in a better place today” than yesterday, pointing to the removal of the whisky tariff, which first minister John Swinney said would bring a “significant benefit” for Scottish producers.
But the EU secured better treatment because it passed a ban on forced labour goods, mirroring a US law, while the UK has not. The government said last October it remained “firmly opposed” to forced labour and was “considering how best to reflect this position”. Whether it will now pursue an EU-style ban – widely seen as a backdoor way to target China over Xinjiang – remains an open question.