Key Highlights
- US President Donald Trump’s latest tariff changes raise uncertainty for businesses and consumers.
- A Supreme Court ruling invalidated Trump’s previous tariffs but allowed him to implement new ones under a different law.
- The 15% global tariff rate will increase costs for UK exports, estimated at £2-3 billion annually.
- Uncertainty over existing trade deals and potential future tariffs exacerbates business frustrations.
The Uncertain Tariff Landscape
The US President Donald Trump’s latest tariff moves have left businesses and consumers in a state of confusion. Just when it seemed the previous round of reciprocal tariffs were settled, the Supreme Court struck them down. However, Trump quickly pivoted to an alternative legal basis under Section 122 of the Trade Act 1974, which allows for new temporary 10% tariffs on all goods until Congress intervenes in 150 days.
But wait, there’s more!
On social media, Trump announced he would hike these tariffs to a steep 15%. This sudden change has businesses reeling. William Bain from the British Chambers of Commerce (BCC) puts it succinctly: “There is a weariness about the constant changes.” He adds that companies are frustrated and exasperated by the lack of clarity in tariff policies.
Impact on UK Exports
The 15% tariff rate will significantly impact UK exports to the US. The BCC estimates this could add between £2-3 billion in extra costs annually. This is not just a financial burden; it’s a strategic one.
Paul Ashworth, chief North America economist at Capital Economics, points out that this new tariff regime means previous trade deals may be nullified or partially invalidated.
“Some of America’s biggest trading partners will find themselves exactly back where they were last week,” Ashworth said. This uncertainty is particularly tough for industries like food and drink, textiles, industrial goods, and electrical products, which suddenly face higher export costs to the US market.
Refunds and Further Tariffs
The Supreme Court’s decision also opens the door for companies to seek refunds on the $130 billion in tariffs paid since April last year. However, the process is complex and potentially long-drawn out. The White House has not clarified its stance on refunds directly.
Broadcaster Bob Schwartz from Oxford Economics adds that Trump may use other sections of the Trade Act to impose further tariffs. For instance, he has already used Section 232 for industry-specific duties on sectors like vehicles, steel, and aluminum. “Additional sector-specific tariffs under Section 232 may gain more prominence in 2026,” Schwartz warns.
Consumer Impact
Higher import taxes can be absorbed by exporters or consumers. Research from the Budget Lab at Yale University suggests that US consumers have already been footing a substantial portion of increased tariffs, with estimates ranging between 31% and 63%. The New York Federal Reserve backs this up, estimating that businesses and consumers paid for nearly 90% of additional tariffs.
These higher costs are likely to be passed on to US consumers, leading to higher prices and inflationary pressures.
Business groups fear this increased uncertainty will ultimately hurt product choice in the US market as exporters look to diversify their trade.
So there you have it—a perfect storm of tariff changes that leave businesses and consumers equally uncertain about what’s next. The writing on the wall is clear: Trump’s tariff tactics are far from over, and they’re leaving a trail of confusion in their wake.
