UK in talks with US over ‘best possible deal’ for British firms amid higher tariffs threat | Trump tariffs
The UK government says it wants the “best possible deal” for UK companies, while high-level talks are ongoing with the US administration over the threat of increased tariffs.
Business leaders said they expected the UK to “double down” on the current one. Economic Prosperity Pact (EPD) – announced by Donald Trump and Keir Starmer in May last year – rather than walk away.
Trump’s deals with nearly 20 countries, including the U.K., EU, Switzerland, Japan, Lesotho and others, were thrown into doubt Friday after the U.S. supreme court ruled that the president’s current “reciprocal” tariffs are illegal.
The decision infuriated Trump, who announced on Saturday that he would impose a 15% global tariff on all foreign imports under the 1974 Trade Act, a different legal framework than the one being explored by the US supreme court.
This would potentially mean a 5% increase in the current 10% tariff for UK exporters and a potential increase for EU exporters; because the 15% agreement it guaranteed “covered” the previous tariffs and is not a new tariff.
UK education secretary Bridget Phillipson admitted on Sunday that UK businesses face “uncertainty” following the latest developments but insisted in an interview with Sky News that the UK expects “preferential” trading arrangements with the US to continue.
“We hope and expect that this will continue through the Prime Minister’s work with the US government and President Trump, but these discussions are ongoing,” he said.
“This is an evolving situation. But of course we want to get the best possible deal for British businesses. I understand the uncertainty this creates for them, but they can be assured that we will always work to ensure they get everything they need.”
German MP Bernd Lange, chairman of the international trade committee in the European Parliament, suggested that the vote on the US agreement planned for this week will now be postponed.
The EU-US agreement has been implemented in the US but not yet in the EU, where it needs parliamentary approval.
“Pure tariff chaos from the US administration. No one can make sense of it anymore; there are only open questions and increasing uncertainties for the EU and the US’s other trading partners,” Lange wrote in a post on X on Sunday.
William Bain, head of trade policy at the British Chamber of Commerce, said he expected Britain to “double down” and use the latest development to secure a better long-term deal.
He said the US-UK deal reached in May “was never about the 10 per cent tariff, it was details that included a 10 per cent tariff on cars that was lower than some other countries, the maintenance of the existing 0 per cent tariff on the UK pharmaceutical industry and the promise of a reduction in steel tariffs of 25 per cent which has not yet materialised”.
“What the EPD agreement did was create a framework for negotiations on other sectors such as automotive, steel and aluminium.
“The government sees value in continuing the agreement and this will give them an excellent opportunity to anchor the EPD in legal text,” Bain said.
“In my opinion, their strategy will be doubled down on the EPD.”
David Henig, director of the UK trade policy project at the European Center for International Political Economy, said: “The nature of dealing with this US administration is that no deal can be expected to last long, so all governments will be working out what to do next or what the deal will actually be.”
Under the Trade Act of 1974, the new 15% tariffs can only be imposed for 150 days, or until Aug. 23, when Trump will need Congressional approval to extend them.
“What if Congress doesn’t approve? Could Trump turn around and say, ‘Now I’m going to impose a 14% tariff for the next 150 days,'” Bain said. he said.
“But what’s different now is that Congress is a more powerful player than ever before, opening up a whole new avenue for business lobbying.”
Bain said Trump may also seek to impose tariffs under Section 301 of the Trade Act of 1974, which allows taxes on foreign countries if they are “discriminatory” or “unreasonable.”
Lange’s international trade committee, which holds the key to the EU parliamentary process on approving the US tariff deal, will meet on Monday to discuss next moves.
Parliament’s International Partnership Committee was supposed to vote on the issue on February 24, followed by a final vote by the full parliament in March.
