The incomplete nature of the UK’s trade deal with the United States has been laid bare by Donald Trump’s latest threat to impose sweeping new tariffs. A 100% duty on branded pharmaceuticals, 25% on heavy-duty trucks, and 50% on kitchen cabinets has revealed the vulnerability of sectors that were not covered in the agreement struck five months ago.
The UK pharmaceutical industry is now at the center of the storm. Excluded from the deal that shielded cars and steel, drugmakers are facing the prospect of being priced out of the US market. The British government, acknowledging the concern, has launched into a new round of diplomatic engagement with Washington, vowing to “press the US for outcomes that deliver real benefits for UK industry.”
This latest trade dispute makes the recent pomp and ceremony of Trump’s state visit to the UK seem like a distant memory. Despite a royal banquet and meetings with top business leaders, including the head of pharmaceutical giant GSK, the UK was unable to secure any lasting protection for its key export sectors. Trump’s earlier promise of “preferential treatment” for UK pharma has been supplanted by this new, aggressive stance.
There may be a strategic logic behind the threats, however. Some analysts contend the tariffs are not meant to be universal. Instead, they are likely designed to exempt companies that have or are building manufacturing plants in the US. This would reward firms for investing in America while punishing those that rely solely on exports. Swiss firms Roche and Novartis have already stated they expect to be spared for this reason.
This policy has nonetheless created turmoil in other industries. The German auto trade body has condemned the 25% truck tariff as counterproductive, warning it will harm American jobs and increase costs. The focus now shifts to whether exemptions will be granted for partners in the United States-Mexico-Canada Agreement (USMCA), a key question that will determine whether Mexico, a major truck exporter to the US, will bear the brunt of the impact.
Incomplete Deal Leaves UK Exposed as Trump Unleashes New Tariff Storm
