A Scottish distillery is loading the first shipment of tariff-free Scotch whisky destined for the United States, a rare bright spot in a trade landscape that has left many UK exporters feeling they got the worst of both worlds. Just months after Prime Minister Keir Starmer hailed a special trade deal struck at Donald Trump's Turnberry golf resort, the Trump administration has imposed new tariffs on roughly 60 countries, citing forced labour concerns. While the UK's headline tariff rate stayed the same, experts say the EU now has a competitive edge in sectors not covered by the deal.
The basics are simple: tariffs are taxes on imported goods, paid by the importing company, which often passes the cost to consumers. The Trump administration has used various justifications to impose tariffs on allies, from national security to illegal migration. The latest round, announced in late July 2026, uses a new rationale: that trading partners have failed to properly stop forced labour in their supply chains. This legal authority shores up the tariffs against challenges from Congress or the courts, as one industry figure described them as "tariffs in search of an authority."
“Trump's latest tariffs on 60 countries leave UK exporters at a competitive disadvantage to the EU, despite a special deal.”
Under the Turnberry deal struck last year, the UK secured a 10% tariff on most goods, plus preferential rates on cars, pharmaceuticals, and aerospace, and exemptions on steel, aluminium, and medicines. Crucially, the deal prevented any additional tariffs on top of that 10% rate. The EU, by contrast, had been facing a 15% near-blanket tariff. But in this new round, the EU's rate was reduced to 10%—the same headline figure as the UK's. However, the EU now gets a flat 10% rate on all goods, while the UK's 10% applies alongside other tariffs on a range of products, including footwear and textiles. The result, the British Chambers of Commerce trade expert William Bain explained, is that EU exporters have a competitive advantage in sectors not specified in the Turnberry deal, such as bikes, clothing, chemicals, and beverages. For example, a British knitted jumper now faces an additional tariff on top of the 10%, while EU competitors do not.
So why does this matter for UK readers? It means British businesses exporting to the US—especially in sectors like clothing, footwear, and textiles—now face higher costs than their EU rivals. This could make UK goods more expensive for American buyers, reducing sales and profits. For consumers, this may not have an immediate effect, but over time it could impact jobs and investment in exporting industries. The government has celebrated some wins: Scotch whisky tariffs were lifted entirely after King Charles's state visit, giving Scottish distillers an edge over Irish and French competitors. But the overall trade-weighted effective tariff rate for the UK is now estimated at 6.8%, slightly higher than the EU's 8.5%? Actually the BBC reports the EU's rate is 8.5% and the UK's 6.8%, making the UK better off on average. Wait, let me correct: the BBC says the EU's effective rate could be 8.5% and the UK's 6.8%, so the UK is still better on average. But the Guardian says some sectors are disadvantaged. The key point is that the advantage the UK gained from being first to do a deal has eroded.
Q: Does the UK have a trade deal with the US? Yes, the UK agreed an economic prosperity deal (EPD) with the US in 2025, often called the Turnberry deal after Trump's Scottish golf course where it was signed. It set a 10% tariff on most UK goods and gave preferential rates on cars, medicines, and aerospace.
Q: Why did the US impose these new tariffs on the UK? The Trump administration claims the UK and dozens of other countries have failed to pass legislation to ban imports of goods made with forced labour. The UK government says it "remains firmly opposed to forced labour" but has not yet enacted a ban similar to the US or EU.
Q: Are Scotch whisky exports now tariff-free? Yes, the US has lifted the 10% tariff on Scotch whisky after King Charles's state visit in April 2026. The first tariff-free shipment left Scotland within 48 hours of the announcement.
What happens next? The UK government may now consider passing its own forced labour ban to align with the US and EU, which could help secure better terms. But any renegotiation of the Turnberry deal is uncertain. In the meantime, UK exporters in sectors like clothing will face tougher competition from EU rivals who enjoy a flat 10% rate. The global trade war reignited by Trump shows no signs of cooling.