“Staring down the barrel at high costs”: US tariffs and financial news for UK businesses spell an uncertain future

Donald Trump’s new global tariff hikes, set to take effect from Tuesday, have left UK businesses facing uncertainty and higher costs.

Governments around the world have been scrambling for information since Friday, when the US Supreme Court struck down his “Liberation Day” tariff policy and the President announced a temporary 15% tax on imports into the US from all countries.

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Many British businesses are in the same situation and now fear the high costs of bringing their products to the US.

Manufacturing industry trade body Make UK said, “There is now an urgent need for clarity on how UK exports will be treated upon arrival in the United States.”

UK exporters will face a 15% tariff from Tuesday morning, which is an increase from the previously agreed 10% tariff. The UK-US deal was signed back in May.

The British Chambers of Commerce (BCC) said on Monday, “Until we hear otherwise from the US, we are expecting a 5% increase for many goods from 5am GMT tomorrow. However, the nature of the legislation the US is using means it is difficult to exempt the UK.”

UK exporters and manufacturers are “now facing higher cost pressures”, the organisation said.

What is happening?

After protesting the court’s decision on Friday, Mr Trump said over the weekend he would instead impose a 15% tariff rate on all countries.

This was more than the 10% they had announced the day before.

Under US law, known as Section 122, this policy limits such action to a period of 150 days. If the statute is to be extended, Congressional approval must be obtained.

It was unclear whether the 15% rate would apply to countries like the UK, which struck deals with the US to avoid the worst of the punitive tariffs announced last April.

What is the UK government doing?

Despite the uncertainty businesses face, the Prime Minister’s official spokesman said he expected Washington to “respect” its previously agreed “preferential deal” and that negotiations were ongoing.

“Discussions are taking place at all levels,” he said.

Asked whether Britain could impose retaliatory tariffs on the US, the spokesman told reporters, “Nothing is off the table.”

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The spokesperson also said Trade Secretary Peter Kyle spoke to his US counterpart Jamieson Greer over the weekend and “underscored his concerns about further uncertainty in trade and stressed the need to respect the UK-US agreement.”

He was unable to say when the government would get clarity on how tariffs would apply to British goods and services or whether agreements on trade in steel and cars would be honoured.

Trump’s tariff turmoil: what’s going on?

global chaos

Companies and governments around the world are grappling with the latest business reality.

The European Union (EU), the world’s largest trading bloc, announced on Monday afternoon that it would put on hold the ratification of its agreement with the US in response to the emerging situation.

“No one knows what will happen,” said Bernd Lange, head of the European Parliament’s international trade committee.

“We need clarity and legal certainty before taking any further steps,” he stated.

On Monday Mr Trump issued a warning on his Truth Social platform.

He wrote, “Any country that wants to ‘play games’ with the Supreme Court’s ridiculous decision, especially those countries that have ‘cheated’ the United States for years and even decades, will face much higher tariffs and worse than those to which they have just recently agreed.”

Meanwhile, Democrats plan to introduce a bill that would require US Customs and Border Protection to issue refunds, including interest, to companies for the amounts they paid to bring goods into the US.

The selling in the stock market continued from Friday to Monday. Most major stock indexes in Europe closed lower as their US counterparts also fell.