UK ‘working with US’ to analyse impact of supreme court’s ruling against tariffs | Trade policy
While Britain and the EU said they were considering the consequences of the US supreme court’s decision against Donald Trump’s global tariffs, business groups reacted cautiously to the court’s announcement.
A Downing Street spokesman said: “The UK government is working with the US to understand how the Supreme Court overturning of Donald Trump’s tariffs will affect the UK but expects us to maintain our privileged trading position with the US.”
The UK became the first country to enter into a tariff agreement with the US, which imposes a 10% tariff on all imports from Britain, compared to a general rate of 15% for the EU.
The EU said it was analyzing the decision as it continues its efforts to reduce US customs duties on European exports.
The EU agreed a 15% tariff rate with the US at Trump’s golf course in Scotland last July, but steel still faces a 50% tariff.
“We are in close contact with the US administration and are seeking clarity on the steps they plan to take in response to this decision,” the statement said.
“Businesses on both sides of the Atlantic depend on stability and predictability in trade relations. That’s why we continue to advocate for low tariffs and work to reduce them.”
Companies affected by the tariffs should be able to seek reimbursement from the US government, but the mechanism for doing so remains unclear.
It is understood that tariffs on products such as steel will not be affected and will likely remain the same. Some experts have warned that the White House could move to broader product-based tariffs affecting computer chips and agriculture, and possibly take an even more draconian approach with higher tariffs.
John Denton, secretary general of the International Chambers of Commerce, said there was “new uncertainty” for companies looking to trade with the US.
“Many businesses will welcome the prospect of refunds following today’s decision, given the significant pressure posed by IEEPA. [International Emergency Economic Powers Act] Tariffs have been placed on corporate balance sheets in recent months.
“But companies should not expect a simple process: The nature of U.S. import procedures means that requests are likely to be administratively complex.”
William Bain, head of trade policy at the British Chambers of Commerce, said the high court had clarified the use of executive powers to raise tariffs but had “done little to clear murky waters for business”.
“If he wishes, [Trump] It could use the Trade Act 1974 to impose higher tariffs than the 10% surcharges the UK and Australia are already hit on many goods sectors.
“We have recently reached a good agreement on medicines and we should focus on using the economic prosperity agreement to ensure the UK receives the preferential treatment set out there.”
One aerospace industry insider said: “It’s a relief that this has been announced, but I don’t think it’s that helpful in terms of geopolitical tensions.
“We still have a very uncertain US administration, and I think that kind of public punishment is not going to go well with some of the trade relations.”
In equity markets, Britain’s FTSE 100 index reached a new intraday high on Friday, closing up 0.56% following the announcement of the Supreme Court decision.
While exporters were among the risers, beverage company Diageo, whose Scotch whiskey and Mexican tequila brands were affected by Trump’s tariffs, recorded an increase of 3.9%. Luxury fashion brand Burberry gained 3.3% in value.
Some European carmakers also benefited: Stellantis, whose brands include Citroën, Fiat and Vauxhall, rose by 2%.
U.S. government bond prices have fallen and borrowing costs have risen as investors anticipate lost revenue from tariffs and the possibility of U.S. companies getting refunds on import costs. The dollar weakened slightly.
