How will Trump’s tariffs affect the UK economy?
Economists believe that Donald Trump’s 10 percent tariff on the UK could have a damaging effect on the UK economy, potentially pushing it into recession.
The US president has threatened to raise tariffs to 25 percent starting June 1 until an agreement is reached to buy Greenland from Denmark. Valid for the United Kingdom, Denmark, Norway, Sweden, France, Germany, Netherlands and Finland.
While EU diplomats are expected to hold an emergency meeting on Sunday, the countries issued a statement underlining their solidarity with Denmark.
Mr. Trump has long had his eye on Greenland and first suggested the United States control the region in 2019. In his renewed takeover plan, he said “it’s time for Denmark to give it back” and added: “China and Russia want Greenland and there’s nothing Denmark can do about it.”
Sir Keir Starmer said the government would take up the issue directly with the Trump administration after the US president warned that “world peace” would be at risk if the US was not allowed to control the semi-autonomous Danish territory.
“Imposing customs duties on allies in order to ensure the collective security of NATO allies is completely wrong,” the Prime Minister said in his statement. “Of course, we will pursue this directly with the US administration.”
What do the UK and the EU export to the USA?
Automobiles, medicines and pharmaceutical products, and machinery are among the exports that will be subject to customs duties to the USA. The UK also exports scientific equipment, non-ferrous metals and organic chemicals.
According to the Office for National Statistics (ONS), Americans bought £27.8bn of machinery and transport equipment, £16.7bn of cars and other road vehicles, £14.3bn of chemicals, £11.7bn of machinery and £10.8bn of medicines in the 12 months to November.
Between July 2024 and July 2025, the US was the UK’s largest trading partner, accounting for 17.8 per cent of total UK trade, according to the ONS.
How will tariffs harm trade?
Higher prices for U.S. goods are likely to reduce demand for these products. This will affect trade for British exporters.
“New tariffs on goods exported to the US will be further bad news for UK exporters who are already struggling with tariffs imposed last year,” said William Bain, head of trade policy at the British Chamber of Commerce.
“We know that trade is a way to strengthen the economy and that the success of transatlantic trade depends on reducing tariffs, not increasing them.”
Last year, the US and Britain reached an agreement that would impose a 10 percent tariff on most British products.
Marco Forgione, director general of the Institute for Export and International Trade, said the impact on the UK would be “huge” and could even “push the UK into recession”.
he said Telegram: “We’re going to see trade in goods with the US suddenly become uncompetitive in the market. So the impact of that on the UK will be huge, especially at a time when we’re struggling with very stagnant growth.”
Trump’s tariffs on other countries
Trump threatened China with 145 percent tariffs at some stage in 2025 after the Chinese government announced plans for new export controls on rare earth metals used in various technology-related products.
It later reduced the rate to 47.5 percent, admitting it was not sustainable.
India faced a 50 percent tariff due to its appetite for Russian oil. However, the tariff was not unilaterally applied to all products. Various exemptions have been introduced, including for the pharmaceutical and electronics sectors.
