From "special treatment" to biggest loser? The UK may become the biggest victim of Trump's new tariffs

From "special treatment" to biggest loser? The UK may become the biggest victim of Trump's new tariffs

According to media reports, after months of high-profile promotion of preferential trade deals with US President Trump, Britain now faces the risk of becoming the biggest loser as the US Supreme Court rules against its global tariff policy.

Previously, the UK enjoyed a relatively low, reciprocal 10% tariff rate, giving it a competitive advantage over other countries. But Trump pledged to raise tariffs for all countries to 15%, meaning businesses may now face a higher tax burden. According to Global Trade Alert data, the UK faces the largest tariff increase, followed by Italy and Singapore.

Sam Lowe, a trade expert at the London consulting firm Flint Global, said:

"We are not yet sure whether the previously agreed 10% tariff deal will be honoured— but unless and until the US states otherwise, we have to assume the rate will be 15%."

British officials are currently anxiously trying to persuade the US government to exclude the UK from the higher tariff rate. The British Chamber of Commerce estimates that this adjustment will increase export costs to the US by up to £3 billion (about US$4 billion), affecting 40,000 British businesses.

Cabinet Minister Bridget Phillipson admitted to the media on Sunday that this does indeed bring "uncertainty" to British businesses:

"We are holding talks at the highest level to ensure that we communicate what we believe is in the national interest clearly and unequivocally to the US."

Trump's new tariff regime is implemented under Section 122 of the 1974 Trade Act, which can only last up to 150 days unless extended by Congress. Previously, a US-UK deal exempted tariffs on steel, pharmaceuticals and automobiles, and these exemptions are expected to remain, allowing Britain to retain preferential treatment in these critical sectors.

UK: Still counting on the special UK-US relationship

The UK government said in a statement that it expects the "superior" trade status negotiated with the US last year under the so-called Economic Prosperity Deal to continue to exist "under all circumstances".

The British Prime Minister's spokesman Tom Wells told reporters on Monday:

"The situation is changing rapidly."

"We do not believe this ruling will affect most of the trade under the Economic Prosperity Deal, including industry tariff arrangements we have already reached."

However, former UK chief trade negotiator Crawford Falconer stated that for British companies exporting other products to the US,

"they will now face higher tariffs, similar to what the EU previously faced,"

"On the surface, Australia and the UK suffer the most negative impact: everyone will hope for a clear statement as soon as possible, even to lower the tariffs."

Prior to the Supreme Court decision, Australia also enjoyed a 10% tariff rate.

The UK has already invested significant diplomatic resources to seek preferential treatment from the White House. Last month, Starmer helped persuade Trump to drop the threat of higher tariffs on Europe due to European support for Denmark and Greenland.

Fraser Smeaton, co-founder of costume exporter MorphCostumes, said Trump's newly announced tariff rate is the latest twist in a "roller coaster" year.

Smeaton told the media on Monday:

"We have experienced a lot of disruption and uncertainty. What we really want is certainty, and the ability to predict what costs we will have to pay in the future, because that is what makes it so difficult to operate right now."

The Prime Minister's spokesman Wells said, although "no options have been ruled out" regarding UK response measures,

"the industry does not want to see a trade war or continual escalation. That’s why our focus is constructive engagement with our US counterparts to preserve Britain's competitive advantage."

Former UK chief trade negotiator Falconer said that as countries like India and Indonesia will now enjoy lower tariffs, the US "has already lost a substantial portion of tariff income," and Trump and his team may therefore be distracted.

"In the next five months, they will be busy seeking ways to fill the gap, and it will be very difficult to find time to resolve Britain's special issues."

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