The US has introduced new tariffs to replace its current levies on UK imports which have expired today. For most UK companies there is no effective change, but there is welcome confirmation that the removal of US tariffs on whisky has taken effect
Duties that must be paid on most imports of UK goods to the US will remain at 10 per cent, plus previously existing Most-Favoured Nation duty rates.
For steel and aluminium goods, the UK keeps its comparative advantage with the US, as it faces duties of 25%, compared with 50% for many other countries. On pharmaceuticals and automotives, the UK also has a strong position – none of those tariff arrangements have changed.
However, in other sectors, businesses will be concerned about their competitiveness – as imports of goods from other countries have been treated differently.
Responding to the changes, William Bain, Head of Trade Policy at the British Chambers of Commerce, said:
“For most firms exporting goods to the US it will remain business as usual today, they will see no change in the costs they are facing. There is also some good news with the removal of tariffs on whisky, one of the UK’s global export success stories.
“The Economic Prosperity Deal with the US also means that automotives, pharmaceuticals, steel and aluminium are insulated from these changes and should not face further investigation.
“However, there will be concerns about the loss of the UK’s competitive advantage over the EU and other countries which have secured a more favourable deal in other goods sectors.
“The US is also carrying our further investigations over digital service taxes which could lead to further uncertainty for firms.
“It is crucial that the UK continues negotiations to ensure our companies have the best possible long-term trading terms with the US. Expanding our goods and services exports is vital to the UK’s economic growth and the US is our largest single country trading partner.
“But this is unlikely to be the end of the story on US tariffs for either the UK or the rest of the world. The government will need to keep a close eye on developments to keep the UK at the front of the pack.”
More detail on the new US tariffs can be found here.