Faisal Islam: The UK's Trump trade deal no longer looks world-beating

Faisal Islam: The UK's Trump trade deal no longer looks world-beating It has been a long road for President Donald Trump as he seeks a justification to raise a tariff a United States, including against key allies. From the opioid situation tariff barrier around the United States, including against key allies. From the opioid situation to unlawful migration, and then the request to bring manufacturing back to America's shores, the list goes on. Through Trump's second term, there has been a new justification roughly each period for the commercial levies he is seeking to place on allies. Some have been overturned by the courts, others by economics and some even by their own logic. And so, Trump has now turned to effectively accusing dozens of commercial partners of trading in goods that have been produced using forced labour. These are "tariffs successful hunt of an authority", as one manufacturing figure put it. The forced‑labour argument shores up President Trump's tariffs against a challenge from Congress or the courts. In practice, the levies are curiously similar by country to an earlier round of tariffs supposedly imposed for entirely different reasons. The good news for the UK is that the government’s position effectively remains the same as before. What has changed is that our nearest neighbours in the European Union now have a much better deal than before, and consequently are in a stronger position than the UK. While the UK and the EU each face a 10 % rate, the EU’s is a flat rate, whereas the UK’s will apply alongside other tariffs on a range of goods including footwear and textiles. The government has struck effective side‑deals on medicines, steel, aluminium, cars and, with the assistance of King Charles, whisky. At the end of this process, however, the overall trade‑weighted effective tariff rate for the EU (8.5 %) could end up slightly lower than the UK’s (6.8 %). That difference may seem modest, but the advantage gained from striking the initial deal and from post‑Brexit trade freedoms appears to have been short‑lived. William Bain, trade expert at the British Chambers of Commerce, points to the competitive edge for EU exporters into the US in certain sectors. The EU has secured better access because it has enacted a ban on forced‑labour goods, which the UK has not. This is not an accusation about the use of forced labour in supply chains; it concerns the passage of specific legislation that mirrors the US prohibition on products made with forced labour in supply chains. Read the full story at BBC News →