(Bloomberg) — After boasting for months about its preferential trade deal with U.S. President Donald Trump, the United Kingdom risks becoming the biggest loser following the Supreme Court’s decision to strike down its global tariffs.
The UK enjoyed a relatively lower reciprocal tariff rate of 10% compared to other countries — giving it a competitive advantage — but Trump’s pledge to reimpose tariffs at 15% for all nations means companies could now face even higher tariffs. The UK will see the biggest increase as a result, followed by Italy and Singapore, according to Global Trade Alert, while Brazil, China and India will benefit the most.
“At the moment we are unclear whether the agreed 10% tariff will be respected – but until the US gives some guidance, we have to assume it will be 15%,” said Sam Lowe, a trade expert at strategic consultancy Flint Global in London.
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British officials are now nervously trying to persuade the American government to exempt them from the higher rate. The British Chamber of Commerce estimates this will increase the cost of UK exports to the US by up to £3 billion ($4 billion) and affect 40,000 British businesses.
“We are talking at the highest levels to ensure that what we consider to be in our national interest is heard clearly by our American colleagues,” Minister Bridget Phillipson told Sky News on Sunday. She acknowledged the “uncertainty this causes” for British businesses.
Trump’s new tariff regime, imposed by Section 122 of the 1974 Trade Act, can be in effect for a maximum of 150 days unless Congress extends it. Tariff exemptions on steel, pharmaceuticals and cars — previously agreed between the UK and US — are expected to remain in place, granting Britain preferential status in these key sectors.
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“In any scenario, we expect our privileged trading position with the US to continue,” a government spokesperson said.
Still, companies that export other products to the U.S. — from Scotch whiskey to toys — “will now face a higher tariff, equivalent to what the EU faced before,” said Crawford Falconer, a former British trade negotiator. “It appears that Australia and the UK have been most negatively affected: there will be a desire to get clarification and indeed to reduce the tariff.” Australia was also subject to the 10% tax before the Supreme Court ruling.
The UK has already invested significant diplomatic capital to gain preferential treatment from the White House. Last month, Prime Minister Keir Starmer helped persuade Trump to back off his threat to impose higher tariffs on Europe in retaliation for the continent’s support for Denmark and Greenland.
Fraser Smeaton, co-founder of MorphCostumes, a costume company that exports to the US, said the new tariffs announced by Trump were the latest development in a “turbulent year”.
“We have had to deal with a lot of turbulence and uncertainty,” Smeaton told BBC radio on Monday. “What we would really like is certainty and the ability to predict how much we will have to pay in the future, because that is what is making our business very difficult right now.”
The so-called “special relationship” between Britain and the US became even more strained last week when Trump sharply criticized the UK’s deal to transfer sovereignty of the Chagos Islands to Mauritius. This emerged again in retaliation for the UK’s delay in granting Trump permission to use the Diego Garcia military base in the archipelago for a possible attack on Iran.
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Trump and his team will also likely be distracted by the setback to the tariff regime, which, due to the lower rates that will now be applied to countries like India and Indonesia, means the US has “lost a lot of tariff revenue,” Falconer said.
“They will spend the next five months finding other ways to fill the gaps,” Falconer said. “Trying to get time with the US to resolve the UK’s specific problem will be quite difficult.”
© 2026 Bloomberg L.P.
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