US Imposes New 10% Tariff on UK Goods, Sparking Business Uncertainty

New Tariffs Take Effect Following Supreme Court Ruling

The United States officially imposed a new 10% tariff on a broad spectrum of goods imported from the United Kingdom, effective February 24, 2026. This action by the US administration comes shortly after a US Supreme Court decision on February 20, 2026, which invalidated a previous set of tariffs that had been implemented under the International Emergency Economic Powers Act (IEEPA). President Donald Trump subsequently invoked Section 122 of the 1974 Trade Act to enact these new duties, which apply to most imports for a period of 150 days without requiring immediate Congressional approval.

Details of the New Trade Measures

The newly applied 10% ad valorem duty is levied on 'imported articles of every country,' including the UK, and is in addition to existing Most Favored Nation (MFN) duties. While President Trump had initially threatened to impose a higher 15% global tariff, the implemented rate stands at 10%. However, certain categories of goods are exempt from this new tariff. These exemptions include:

• Steel and aluminum articles, which remain subject to separate 25% tariffs.
• Automobiles and automobile parts, also under separate 25% tariffs, though the UK benefits from a reduced 10% rate for up to 100,000 vehicles annually under a prior agreement.
• Copper, pharmaceuticals, semiconductors, lumber, energy, energy products, and other minerals not readily available in the US.

The administration's rationale for these tariffs stems from its 'reciprocal tariffs' and 'Liberation Day' trade agenda, aiming to address perceived trade imbalances.

UK Government and Business Reaction

The imposition of these new tariffs has elicited strong reactions from the United Kingdom. Downing Street has indicated that 'nothing is off the table' in terms of the UK's response, including the possibility of reciprocal trade measures. Business Secretary Peter Kyle engaged in discussions with his US counterpart, Jamieson Greer, to convey the UK's concerns regarding the increased uncertainty for businesses and to emphasize the importance of upholding the existing UK-US Economic Prosperity Deal (EPD). The British Chambers of Commerce (BCC), through its Head of Trade Policy, William Bain, warned of 'fresh uncertainty' for UK firms exporting to the US. Bain highlighted the significant challenges businesses face in planning and understanding pricing and margins, noting that a 15% tariff, if implemented, could increase costs for UK exports by an estimated £2 billion to £3 billion.

Impact on the US-UK Economic Prosperity Deal

The new tariffs introduce complexities for the US-UK Economic Prosperity Deal, which was agreed upon on May 8, 2025. This deal aimed to deepen bilateral economic ties and mitigate the impact of US tariffs, providing preferential terms for certain UK exports, including reduced tariffs on steel, aluminum, and automotive products. While the EPD secured a 10% baseline tariff for most UK goods and specific carve-outs for key industries, the latest global tariff adds another layer of financial burden and unpredictability for British businesses. The UK government continues to seek clarity on how these new tariffs will interact with the existing deal and is committed to ongoing dialogue with US officials to protect its competitive advantage in the US market.