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Despite the government’s hopes, the United Kingdom was not ultimately exempt from steel and aluminum prices of 25% of President Trump.
Prime Minister Keir Starmer said the United Kingdom “will retain all options on the table”, but has not announced immediate reprisals.
BBC VERIFY examines the extent of the impact on the United Kingdom and which could then happen.
Metal products
The value of exports in raw steel and aluminum from the United Kingdom to the United States in 2024 was around 470 million pounds sterling.
But it is important to note that these last American rates – import taxes – also cover steel and aluminum products, which covers everything, from gymnasium equipment to furniture via machines.
It is estimated that the think of the global trade alert reflection group that exports from the United Kingdom of these products to the United States in 2024 were around 2.2 billion pounds sterling.
Thus, the total annual value of affected British exports would be around 2.7 billion pounds sterling.
For the context, the United Kingdom has exported approximately 58 billion pounds sterling of goods in the United States on an annual basis in 2024-the share of goods struck by these new Trump prices represents a little less than 5%.
The United Kingdom hopes to conclude a free trade agreement with the Trump administration, which could mean that these prices are deleted.
But we have no way of knowing if – or how long – such an agreement could be concluded.
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Trump has also threatened to impose reciprocal rates on all trade partners in the United States, including the United Kingdom, from next month.
These are taxes on imports to the United States that are set at a rate similar to taxes that other countries put goods that they import from the United States.
And the White House said that, by deciding what level to define them, it will take into account the rate of taxation of the added value of the countries.
The American government considers VAT as a tax that discriminates American imports – even if it also applies to imports and goods produced at the national level.
The United Kingdom has a standard VAT rate of 20%, which could potentially mean that the United Kingdom is struck by a substantial reciprocal tariff in the United States.
Although the United Kingdom does not yet retaliate, the European Union has already confirmed that it planned to impose prices on 26 billion euros (22 billion pounds sterling) per year of goods imported from America.
And the EU aims for American products, including Bourbon whiskey, Harley-Davidson jeans and motorcycles, which are considered politically sensitive in America because of their emblematic status and because of which American states are produced.
Notwithstanding the hope of a free trade agreement, following any reciprocal prices imposed by the United States, which is perceived as unjust and punitive, the British government could find itself under increasing pressure to retaliate in the same way as the EU.
Why is Trump imposing prices?
The American president has a long and often changing list – justifications to impose these taxes on import.
The first is that he claims to want to restore equity for American trade relations with the rest of the world.
Trump complains that some other countries have higher prices on the goods they import from the United States than the reverse.
The United States had an average external rate of 3.3% in 2023.
It was slightly lower than the average price of 3.8% of the United Kingdom.
It was also below the average rate of 5% of the European Union and the average price of 7.5% of China.
However, the average price of America was considerably lower than those of some of its other business partners such as India (17%) and South Korea (13.4%).
In general, it is legitimate for Trump to emphasize that some countries have a higher average price on imports than America.
Replace income tax?
Another justification for the president’s rates is to increase more tax revenue for the United States government. At one point in the presidential election campaign in 2024, he suggested that tariff revenues could fully replace federal income tax.
This is not only improbable given the value of 3 dollars per year of American imports and the 2 dollars per year raised by income tax – but it is necessary to see in the context of the fact that the prices would increase the prices of American consumers.
Trump also wants to put pressure on other countries to modify some of their policies. This was the explicit justification of American prices in Canada and Mexico, the White House saying that it wanted to put these countries to eliminate the smuggling of a cross -border fentanyl.
Another key objective articulated by the president is to want to encourage multinational manufacturing companies to invest and produce more in America to create national jobs.
Some of these justifications are inconsistent.
The prices cannot be both a significant increase in permanent tax revenue as well as a means of reducing manufacturing to America on a large scale, because the latter implies imports – and therefore pricing income – the fall.
In addition, the vast majority of economists are also extremely skeptical about the probability that prices reach many of these objectives.
