U.S. President Donald Trump imposed a 15% "single tariff" worldwide to replace the reciprocal tariff that the Supreme Court ruled unlawful, and analysis says the United Kingdom, which benefited from the existing tariff regime, will be hit the hardest.
Earlier, on the 20th, the U.S. Supreme Court found that the reciprocal tariff President Trump imposed last year on major trading partners, citing the International Emergency Economic Powers Act (IEEPA) of 1977, exceeded presidential authority. In response, Trump said, "I will do everything to collect more money than before," signed an executive order on the 24th imposing a 10% global tariff on all countries, and the next day said he would raise it again to 15%.
According to Global Trade Alert (GTA), a trade research organization, on the 22nd local time, if the Trump administration's 15% global single tariff is applied, the United Kingdom will face a higher tariff rate than the 10% it had agreed with the United States. As a result, it is expected to suffer the most damage among major trading partners. GTA estimates that the United Kingdom's trade-weighted average tariff rate will rise by 2.1 percentage points (p) from before.
The United Kingdom settled tariff issues with the United States in May last year, about a month after the Trump administration released its reciprocal tariff policy, becoming the first among major trading nations to do so. At the time, it agreed to a 10% tariff rate in exchange for large-scale investment in the United States and has since received more favorable treatment than other trading nations.
Sam Lowe, head of trade at consulting firm Flint Global, said, "For now, it is unclear whether the agreed 10% tariff will be maintained," adding, "Until the United States clarifies a separate position, we should assume a 15% tariff will apply."
Crawford Falconer, a former U.K. chief trade negotiator, also said, "Corporations exporting a range of products to the United States, from Scotch whisky to toys, will now face higher tariffs, at levels previously applied to the EU."
Bloomberg said that day, "The United Kingdom, which for months has touted a preferential trade deal with President Donald Trump, is at risk of becoming the biggest loser after the Supreme Court ruling against the international tariff policy." The U.K.'s Financial Times (FT) also reported, "The United Kingdom, the European Union (EU), Japan, and other long-standing U.S. allies are expected to take the biggest hit from the new tariffs."
In the case of the EU, which had agreed with the Trump administration on a 15% tariff rate, the average tariff rate is expected to rise by about 0.8 percentage point. GTA also projected that Korea and Japan will see somewhat higher average tariff rates under the new single-tariff regime. The organization added that Italy and Singapore will also see their average tariff rates increase by 1.7 percentage points and 1.1 percentage points, respectively, compared with the IEEPA regime, making them major losers after the United Kingdom.
By contrast, countries such as Brazil, China, and India, which had faced high tariffs due to tensions with the United States, are expected to benefit significantly under the new tariff regime. If the 15% global tariff is applied, Brazil's average tariff rate will fall by 13.6 percentage points from before, making it the biggest beneficiary among major trading partners. China's average tariff rate will also drop by 7.1 percentage points, the second-biggest decrease, and India, Canada, and Mexico are also expected to benefit under the 15% single-tariff regime.
Bloomberg reported that U.K. government officials are trying to persuade the administration to exempt the country from the higher tariff rates. U.K. Cabinet Minister Bridget Phillipson said in an interview with Sky News, "We are holding top-level talks to make clear to the United States what we believe serves the national interest."
The British Chambers of Commerce estimates that under the new tariff regime, the expense for U.K. exports to the United States will rise by up to 3 billion pounds (about 6 trillion won), affecting 40,000 U.K. corporations.