President Trump’s second term has seen repeated shifts in the justifications for imposing trade tariffs on allies, ranging from the opioid crisis and migration concerns to bringing manufacturing back to American shores. Each rationale has either faced legal challenges, economic headwinds, or internal contradictions. Most recently, the administration has reframed tariffs around accusations that trade partners are dealing in goods produced using forced labour, providing what industry observers describe as a legal foundation for the levies.
For the United Kingdom, the headline tariff rate with the US remains comparable to the European Union’s rate at approximately 10%. However, the actual impact differs significantly. The EU’s rate functions as a flat tariff, whereas the UK’s applies alongside additional levies on specific product categories including footwear and textiles. When accounting for side agreements the UK has negotiated on medicines, steel, aluminium, cars, and whisky, the effective trade-weighted tariff rates diverge, with the EU’s standing at approximately 8.5% compared to the UK’s 6.8%.
The EU achieved more favorable terms partly because it has enacted legislation banning imports of goods produced using forced labour, mirroring US restrictions. The UK has not implemented equivalent legislation, despite stating opposition to state-imposed forced labour. The government has cited operational and legal complexities in considering how to address the issue. Meanwhile, the UK has continued welcoming Chinese vehicle imports and is pursuing a services trade deal with China, suggesting a cautious approach to relationships with that country.
Globally, the shifting rationales for US tariffs have prompted other nations to prioritify trade among themselves. Canada increased its overall trade volumes despite losses from US tariffs. China’s trade with the US has remained flat during the first half of the year, while its global trade has grown 21%, including increases with the EU, UK, and Africa.
The UK now faces a decision: pursue legislation similar to the EU’s forced labour ban in hopes of securing improved tariff treatment, or maintain its current negotiated agreements on specific sectors while preserving its broader geopolitical position.
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