UK-US Trade Tensions Over Trump's Tariff Announcement

Downing Street has said no reciprocal action is "off the table" if the US does not honour its tariff deal with the UK, but added that "no one wants a trade war". It comes after US President Donald Trump announced a 15% tariff on all countries from Tuesday. The prime minister's official spokesman said the "majority" of the UK-US deal, such as the tariffs on cars, steel, and pharma, was not expected to change, but described the situation as "evolving" and said discussions between the UK and US were ongoing.

Meanwhile, the EU put its US tariff deal on hold on Monday in response to the 15% tariff announcement as Trump warned that countries that "play games" will face even higher tariffs. On Friday, the US Supreme Court outlawed most of the global tariffs that Trump had announced last year, saying the president had overstepped his powers. That ruling affected all tariffs Trump had introduced using the International Emergency Economic Powers Act (IEEPA), which includes all those announced on "Liberation Day" last year. Trump then announced a new 10% global tariff would replace the ones struck down, and on Saturday revised the rate to 15%.

Britain's Business and Trade Secretary Peter Kyle said he has raised concerns over Trump's tariff plans with his US counterpart, Jamieson Greer. Kyle said he is "laser-focused on protecting businesses and the British public and all options are on the table". He also stressed the importance of both sides honouring the existing trade deal between the UK and US.

The Trump administration's new 15% tariff will be introduced as a temporary solution under Section 122 of the 1974 Trade Act. Some products will be exempted under the levy, such as critical minerals, metals and pharmaceuticals. Analysis from think tank Global Trade Alert (GTA) found that the UK will be among the countries worst hit if the 15% global tariff goes ahead because it had negotiated a 10% tariff deal with the US. Meanwhile, the GTA said countries such as China and Brazil, which currently have higher tariff rates, would be better off.

The 15% global levy does not affect tariffs the UK and US had agreed on specific sectors, such as steel, aluminium, pharmaceuticals, automobiles and aerospace, which represent most of the UK's trade with the US. Only sectors beyond those the UK had negotiated separate sectorial tariffs would face the 15% global rate. This is because the Section 122 legislation Trump has said he will use to impose his 15% tariff is different from the way in which tariffs on specific sectors are introduced.

The British Chamber of Commerce's president, Andy Haldane, told the BBC the UK would "sit towards the bottom of league table" of trade partners if Trump's 15% tariff came into effect. "The perversity of what happened of the weekend was that those who got good deals, the allies, have been most disadvantaged," he added.

US trade representative Greer told CBS on Sunday that he had spoken to the EU and other countries over the weekend. "The deals were not premised on whether or not the emergency tariff litigation would rise or fall," he said. "These deals are going to be good deals. We expect to stand by them. We expect our partners to stand by them."

Despite Greer's assurances, the EU Parliament said on Monday it would put the deal it had secured with the US last year "on hold until further notice". Bernd Lange, chair of Parliament's international trade committee, said "the situation is now more uncertain than ever". "Clarity and legal certainty are needed before any further steps can be taken," he added in social media post.

In a possible reference to the EU's decision, Trump wrote on Truth Social on Monday that "Any Country that wants to 'play games' with the ridiculous supreme court decision [...] will be met with a much higher Tariff, and worse, than that which they just recently agreed to".

The UK prime minister's official spokesman said: "Our approach to the US has always been pragmatic. We continue to have productive conversations with them... and those discussions are happening at all levels, but nothing is off the table at this stage. Industry doesn't want to see a trade war where both sides keep escalating the situation, and that's why our focus is on constructive engagement with our US counterparts to retain the UK's competitive advantage."

Richard Rumbelow, director of international business at manufacturing industry body Make UK, said many UK exporters will be "concerned at the further prospect of trade disruption to goods entering the US market". "Clarity is now urgently required on how UK exports will be treated on arrival into the United States," he added.