Britain's tariff burden worse than EU
Britain faces a higher rate of US tariff than the European Union despite Donald Trump's hatred of Brussels, new analysis shows.
The UK's effective tariff rate – the average charged on British goods exported to the US – is 11.6pc, compared with 9.5pc for the EU, according to Capital Economics.
British imports also face a higher average rate than Mexico, Canada, India, Thailand and Vietnam.
The figures reflect the mix of products being exported to the US. Despite the UK facing just the minimum 10pc tariff introduced by Mr Trump, compared with 20pc for the EU, many British exports are subject to extra sector-specific levies.
Mr Trump has also introduced 25pc tariffs on steel and cars, which is particularly costly to Britain as cars are our largest single export to the US. UK car manufacturers, including brands such as Aston Martin and Jaguar Land Rover, sold £9bn worth of vehicles to the US last year.
By contrast, a larger share of the EU's exports are shielded by a carve-out for pharmaceutical exports. The tariff-free status of drugs means the effective rate paid by EU exporters is well below the 20pc headline level.
Vietnam and India similarly benefit from a carve-out for electronic goods, while Mr Trump has issued exemptions for goods arriving from Canada and Mexico that comply with the terms of the pre-existing United States Mexico Canada Agreement (USMCA).
Higher charges are imposed on products from British companies despite the fact that Mr Trump is deeply critical of the EU, which he has claimed was 'formed to screw the United States'. By contrast, he has praised Sir Keir Starmer's lobbying to try to secure a trade deal for the UK.
After the Prime Minister met with the president in February, Mr Trump said there was a good chance of a deal where 'tariffs wouldn't be necessary' and said Sir Keir had 'earned whatever the hell they pay him over there'.
Mr Trump has threatened to make the tariff burden on Britain even higher after suggesting that he could impose a 100pc levy on foreign-made films in a bid to revive Hollywood.
Britain's film industry is worth £1.4bn to the economy and employs more than 195,000 people. Hollywood giants including Netflix, Amazon and Warner Bros. have all invested heavily in the UK in recent years.
Philippa Childs, head of the Broadcasting, Entertainment, Communications and Theatre Union, said the tariffs 'could deal a knock-out blow to an industry that is only just recovering and will be really worrying news for tens of thousands of skilled freelancers who make films in the UK.'
Capital Economics' analysis underlines the importance of striking a trade deal with America to protect Britain's economy from the worst of Mr Trump's tariffs. British officials are racing to negotiate an agreement, with Rachel Reeves, the Chancellor, meeting her counterpart Scott Bessent in Washington at the end of last month.
However, reports suggest the Trump administration has made Britain a 'second-order priority', with Asian nations such as South Korea given greater focus.
Jonathan Reynolds, the Business Secretary, on Friday said 'all options remain on the table' after the Government closed its consultation on the impact of US tariffs.
Mr Reynolds said: 'We are now in a new era for trade and the economy, and that means going further and faster to strengthen the UK's economy.
'While we analyse responses, this Government's priority will be to build on the strength of our relationship with the US and continue talks to find a resolution for UK businesses.'
Paul Dans, the architect of Project 2025, the Right-wing policy blueprint that is now considered to be the US president's play-book, said Britain should be able to strike a good deal with America.
Mr Dans, who served in the first Trump administration, said: 'Long-term, President Trump ultimately wants to get to a yes on deals and now is the time. Now is the time [for the UK] to make a good deal.
'I think that Britons have suffered a lot of the same fate that we have, and there should be some recognition of the shared experience. The deindustrialisation, the mass immigration, the disorder in society – we feel that on this side of the pond as well.'
Project 2025 was a 900-page document drawn up by the Right-wing Heritage Foundation that made radical policy recommendations such as abolishing the department of education.
Many of its ideas have been taken on by the president and several of its authors now serve in his administration, including Peter Navarro, Mr Trump's trade advisor.
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