British Businesses Face Uncertainty and Higher Costs Due to Trump’s Tariff Hike

British businesses are facing uncertainty and higher costs as a result of Donald Trump’s new global tariff hike, which is set to come into effect. The U.S. Supreme Court struck down its "Liberation Day" tariff policy, and the president announced a temporary 15% tax on imports into the U.S. from all countries.

Impact on British Exporters

Many British companies are now fearing higher costs to import their products into America. The manufacturing trade body Make UK has called for clarity on how British exports will be treated when they arrive in the United States. From Tuesday morning, British exporters will be subject to a 15% tariff, higher than the 10% agreed under a previous agreement between Great Britain and the USA.

What Happens Next?

The policy limits such actions to a period of 150 days, and if the statute is to be extended, congressional approval must be obtained. It is unclear whether the 15% rate will apply to countries like the United Kingdom, which reached agreements with the United States to avoid the worst of the punitive tariffs announced last April.

British Government’s Response

The Prime Minister’s official spokesman said he remained confident that Washington would "honor" its previously agreed "preferential agreement" and that talks were underway. Business Secretary Peter Kyle spoke to his US counterpart and "underlined his concerns about further uncertainty for the economy and reiterated the need to honor the UK-US agreement."

Global Chaos

Companies and governments around the world are grappling with the latest trading realities. The European Union announced that it would put ratification of its agreement with the United States on hold in response to the evolving situation. The chairman of the European Parliament’s International Trade Committee said, "Nobody knows what will happen," and "Clarity and legal certainty are required before further steps can be taken."

Trump’s Warning

On Monday, Mr. Trump issued a warning on his Truth Social platform, stating that any country that wants to "game" with the Supreme Court’s decision will face a much higher and worse tariff than the one they recently agreed to. The stock market selloff continued from Friday to Monday, with most major stock indexes in Europe closing in the red.