'Staring down the barrel at higher costs': UK businesses face uncertain future over US tariffs

UK businesses are facing uncertainty and higher costs as Donald Trump's new global tariff hike is set to take effect from Tuesday.

Governments worldwide have been scrambling for information since Friday when the US Supreme Court struck down his "Liberation Day" tariffs policy, and the president announced a temporary tax of 15% on imports into the US from all countries.

Money blog: 'Sporadic shortages' of four items on supermarket shelves as supply hit

Many British businesses are in the same position, now fearing higher costs to bring their products into America.

"Clarity is now urgently required on how UK exports will be treated on arrival into the United States", said manufacturing industry trade body Make UK.

From Tuesday morning, UK exporters will be subject to a 15% tariff, higher than the 10% agreed under a UK-US deal back in May.

"Unless we hear otherwise from the US, we are looking at a further 5% hike for many goods from 5am GMT, tomorrow. However, the nature of the legislation the US is using means it is difficult to give the UK a carve-out," said the British Chambers of Commerce (BCC) on Monday.

UK exporters and manufacturers "are now staring down the barrel at higher costs", the organisation said.

What's happening?

Mr Trump said over the weekend, after hitting out against the court ruling on Friday, that he would impose a 15% tariff rate on all countries instead.

That was up from the 10% he had announced a day earlier.

The policy, under a US law known as section 122, limits such action to 150 days' duration. If the statute is to be extended, Congressional approval must be obtained.

It had been unclear whether this 15% rate would apply to countries such as the UK, which had completed deals with the US to avoid the worst of the punitive tariffs announced last April.

What's the UK government doing?

Despite the uncertainty businesses face, the prime minister's official spokesman said he remains hopeful Washington will "honour" its previously agreed "preferential deal" and that talks had been under way.

"Discussions are happening at all levels", he added.

Asked if the UK could impose retaliatory tariffs on the US, the spokesman told journalists: "Nothing is off the table."

Read more:
Trump creates more tariff mess for the world
About half of Trump's tariffs are now null and void

Business Secretary Peter Kyle spoke to his US counterpart Jamieson Greer over the weekend and "underlined his concerns about further uncertainty for business and reinforced the need to honour the UK-US deal", the spokesman also said.

He was unable to say when the government might get clarity on how the tariffs would apply to British goods and services, or whether agreements on trade in steel and cars would be honoured.

Global chaos

Companies and governments across the world are grappling with the latest trade reality.

The world's biggest trading bloc, the European Union (EU), announced on Monday afternoon it would put ratification of its deal with the US on hold in response to the evolving situation.

"Nobody knows what will happen", the European Parliament's international trade committee chief Bernd Lange said.

"Clarity and legal certainty are needed before any further steps can be taken," he added.

On Monday, Mr Trump issued a warning on his Truth Social platform.

"Any Country that wants to 'play games' with the ridiculous Supreme Court decision, especially those that have 'ripped off' the USA for years, and even decades, will be met with a much higher tariff, and worse, than that which they just recently agreed to," he wrote.

Meanwhile, Democrats planned to unveil a bill requiring US Customs and Border Protection to issue companies refunds with interest for sums paid to bring items into the US.

A stock market sell-off continued from Friday into Monday. Most major stock indexes in Europe closed down as their US equivalents also fell.

(c) Sky News 2026: 'Staring down the barrel at higher costs': UK businesses face uncertain future over US tariffs