New US tariffs leave UK trailing EU in key export sectors
Washington’s decision to cut the EU’s blanket tariff to 10% has handed European manufacturers a pricing edge over British rivals, despite London hailing its unchanged headline rate.
The United States has reduced the EU’s blanket tariff to 10%, replacing the previous 15% rate established under last year’s Turnberry agreement. The move, announced by US Trade Representative Jamieson Greer, means the bloc now matches the headline 10% tariff rate the UK secured in its economic prosperity deal.
However, the EU’s new rate is all-inclusive, while the UK’s 10% is layered on top of existing product-specific levies. This structural difference gives European businesses a decisive price advantage in sectors not specifically exempted under the UK deal, such as clothing, chemicals, bicycles and beverages.
The disparity is stark in apparel. A British knitted jumper faces a standard 12.5% duty plus the 10% economic prosperity deal tariff, totalling 22.5%. An equivalent EU jumper enters the US at a flat 10%. "Clearly there is a difference between how the UK has been treated today and how the EU has been treated today. And that is undeniable," said William Bain, trade policy director at the British Chambers of Commerce.
London insists there is no negative change. A government spokesperson noted the sectors where the EU now has lower rates account for roughly 10% of total UK exports to the US, valued at about £5 billion. The government also emphasised that, unlike the EU, the UK is not facing further US tariff investigations.
The UK did secure one clear victory: a cut to zero tariffs on Scottish whisky. The first tariff-free shipment will leave the UK within 48 hours, giving Scottish distillers a major edge over Irish and French spirits rivals, which remain subject to a 10% duty. The UK also secured zero tariffs on medical technology.
British trade unions view the overall picture as a defeat. "The EU now has a better trading relationship with the US than we do – which undermines the so-called ‘special relationship’," said Charlotte Brumpton-Childs, national secretary of the GMB union.
The EU secured additional exemptions on goods like cork and diamonds. However, an EU spokesperson stressed the bloc did not agree with the "forced labour" premise of the US investigation that triggered these adjustments. Furthermore, the tariff landscape remains volatile. Washington is expected to announce further levies under Section 301 of the 1974 Trade Act, with potential retaliation targeting the EU’s recent €890m fine on Google and threats of 100% tariffs on pharmaceuticals that would heavily impact Ireland, Germany and Belgium.
