LONDON: More than four years after officially leaving the European Union, the United Kingdom has managed to avoid the brunt of new US tariffs — facing only a 10% levy, compared to the 20% imposed on EU countries and 34% on Chinese goods.
Despite this relative reprieve, the UK government’s measured response underscores the fine line it must walk between its two largest trading partners: the United States and the European Union.
The Labour government, in power since July, is particularly cautious not to disrupt ongoing post-Brexit trade negotiations with Washington.
“I acknowledge that the president’s announcement last night puts the UK in a relatively better position than, say, the EU,” said Business Secretary Jonathan Reynolds in an interview with Sky News. While he described the 10% tariff as “disappointing,” he noted that it remains far less punitive than the measures imposed on others.
Prime Minister Keir Starmer echoed that concern during a meeting with business leaders on Thursday, warning that the tariffs would “clearly have an economic impact.” However, unlike other global leaders who hinted at retaliation, Starmer stopped short of harsh criticism — likely to avoid derailing trade discussions.
Tory Cheers, Labour Caution
The Conservative opposition was quick to claim the lower tariff rate as a post-Brexit win. Andrew Griffith, Conservative spokesperson for business and trade, called the US decision a “vindication” of the UK’s exit from the EU.
By contrast, the Labour government offered a more restrained take.
“I’m pleased that we in the UK can now define our own trade policy in our national interest,” Reynolds told Times Radio. “But let’s be clear — this is about more than just our relationship with the EU.”
For some experts, the situation is a mixed bag. “Yes, it’s a ‘win’ in the sense that we would be worse off if we were still part of the EU,” said Jonathan Portes, a professor of economics at King’s College London. “But fundamentally, this is a lose-lose. Tariffs hurt economic growth across the board.”
Between Washington and Brussels
Starmer’s recent trip to Washington in February appeared to rekindle hopes for a comprehensive trade deal with the US. Former President Trump even floated the idea of a “great” agreement that could spare the UK from future tariffs, calling Starmer a “tough negotiator.”
Still, analysts like Portes caution that the UK’s lower tariff rate is less about political goodwill and more about trade metrics. Since the UK doesn’t run a goods trade surplus with the US, it’s less of a target in tariff calculations.
In 2023, the US accounted for 15% of the UK’s goods exports and 10% of its imports, according to the Office for National Statistics.
While the government insists it doesn’t have to choose between Washington and Brussels, some economists warn that accommodating US demands too much could unsettle EU relations — especially since the bloc remains Britain’s largest trading partner by far.
“At this point, the smarter move would be to strengthen trade ties with the EU to offset the economic damage from US tariffs,” said David Henig, director of the UK Trade Policy Project.
Industry Alarm Bells
The government is currently consulting exporters on the potential fallout from retaliatory measures.
“If we manage to secure a deal with the US that results in tariff relief, then these consultations will be paused and any reactive measures shelved,” Reynolds said.
However, the manufacturing sector is already sounding the alarm. Industry group Make UK called the tariffs “devastating.”
“They threaten to unravel decades of integrated supply chains linking the UK to the US through partners like the EU, Canada, and Mexico,” said Chief Executive Stephen Phipson.
