Or the United Kingdom’s recently reached preliminary trade deal with the United States. This deal will eliminate tariffs on key exports, including automobiles and steel. Under the new terms, car tariffs will be reduced to 10%. On top of that, tariffs on both steel and aluminium will be fully removed. The agreement has not fully entered into force yet, creating some uncertainty about what its long-term effects could be.
Simon Jack, the Business Editor for BBC News, reported that despite the optimism surrounding this trade agreement, challenges remain. As one US court recently ruled, numerous tariffs imposed by former President Trump on China were indeed illegal. It excluded tariffs imposed on automobiles, steel and aluminum from their ruling. Our car exports to the US are already hit with a nasty 27.5% tariff. Furthermore, steel and aluminium exports are hit with a 25 percent tariff.
The court’s decision has left many to wonder what this means for the future of US trade policy. While that has generated public policy conversations about lowering overall tariffs, we’ve seen this week that the White House intends to appeal that ruling. This announcement, accompanied with the threat of a lawsuit, emphasizes the uncertainty and unpredictability in trade relations that continues to prevail. The President’s authority to unilaterally impose tariffs is likely to be curtailed by court decisions or Congressional action.
The UK trumpeted its trade deal, with much fanfare. Yet, analysts are casting doubt on whether this deal is even going to provide the UK a superior position over other countries seeking to access the US market. Cars account for one third of the UK’s goods exports to the US. Tariffs are strangling the automotive industry and raising them could be exactly the boost that this trouble industry needs.
As the UK waits for this trade agreement to formally come into effect, businesses are left to continue navigating this uncharted environment. The long-anticipated appeal to that decision by the White House now provides yet another complication to an already twisted trade maze.