As of 0501 GMT on Tuesday 24th February, new US tariff arrangements under section 122 of the Trade Act 1974 came into effect for the next 150 days. These affect goods leaving UK ports bound for the US, which are not covered by the UK’s Economic Prosperity Deal.
A rate of 10% will apply on top of the US’ most favoured nation duties for individual products. The uplift to 15% as announced on Saturday has yet to be implemented by President Trump, but the risk of this tariff still remains and could be introduced at any time. This would add a further 5% hike in duties for applicable UK goods if it is applied.
The new 10% tariffs expire on 24th July unless renewed by an Act of Congress.
Reacting to a this, William Bain, Head of Trade Policy at the British Chambers of Commerce (BCC), said:
“While a new 10 per cent tariff rate, instead of the threatened 15 per cent, will provide some relief it shows how difficult it is for businesses to plan ahead.
“It is far from clear what will happen next, and whether a higher tariff rate is still on the way. Despite the immediate reprieve, there is fresh uncertainty for UK firms exporting goods to the US.
“This makes it very difficult for firms to understand the prices and margins they will be able to secure for their goods, currently under production, for export in several months’ time.
“Inevitably this will have an impact on their sales and hit the economy.
“The BCC has provided government with a six-point plan to guard against the worst economic outcomes from the new tariffs and potential further hikes.
“This includes continued negotiation with the US government, engagement with the US Congress, an uplift in UK Export Finance capacity and reviewing the UK’s Global Tariffs.”
Working with and on behalf of affiliated Chambers, including Cumbria Chamber, the BCC six-point plan to Government to guard against risks to UK exporters of the new tariff system, and to support businesses should the uplift to 15% US tariffs be implemented soon, includes:
- Carry out co-ordinated diplomacy with key international partners to encourage the US Administration to lower the tariffs as soon as possible, and meet with the US Administration and Congressional decision-makers and involve impacted UK businesses.
- Implement the Economic Prosperity Deal and Technology Prosperity Deal in full.
- Raise the capacity of UK Export Finance from £80bn to £100bn, to support exporters as they deal with increased cost pressures.
- Increase facilities and loans from the British Business Bank to support firms facing unexpected increases in costs and strain on cashflow.
- Review the UK Global Tariff (UKGT) to see what further support can be provided to UK manufacturers on import and component costs.
- Boost export support to allow firms to explore other international markets; including the FCDO-BCC Diplomatic Advisory Hub and BCC Trade Accelerator programme.
