Tariff carve-outs emerge

The United Kingdom’s trade talks with Washington now include a possible escape hatch for semiconductors, even as the legal footing for some United States tariffs is unsettled. (commonslibrary.parliament.uk) In a briefing published February 27, the House of Commons Library said the United Kingdom-United States Economic Prosperity Deal “opens the possibility” of exemptions for semiconductors and some other goods from future United States tariffs. The same briefing said a 10% tariff still applies to most other United Kingdom goods entering the United States. (commonslibrary.parliament.uk) The deal was announced on May 8, 2025, and the Library said only part of it has been implemented so far. It listed agriculture, automotive, steel and aluminum, pharmaceuticals, digital trade and aerospace among the sectors covered by the talks. (commonslibrary.parliament.uk) Semiconductors are the tiny chips that run phones, servers, cars and weapons systems, so a sector carve-out would protect a part of trade that sits inside many other products. The House of Commons Library said the broader arrangement is designed to reduce tariff and regulatory barriers while the two governments keep negotiating. (commonslibrary.parliament.uk) The same briefing says the tariff picture changed after a United States Supreme Court decision on February 20, 2026. It says the legal basis for several United States tariffs changed after that ruling, leaving it unclear whether the 10% tariff on most other United Kingdom goods will stay in place or be replaced under a new framework. (commonslibrary.parliament.uk) That uncertainty reaches beyond Britain. Politico reported on April 8 that the Supreme Court had stripped away the president’s main emergency-law route for imposing tariffs quickly, leaving slower and narrower options that require more specific findings. (politico.com) At the same time, President Donald Trump has been threatening new tariffs tied to security disputes with China and Iran. CNBC reported on April 13 that Trump said China could face a 50% tariff if the United States found it was supplying Iran with shoulder-fired air defense missiles, though he also said reports of such a shipment might be “fake.” (cnbc.com) Trump had already posted on April 8 that any country supplying military weapons to Iran would be hit with a 50% tariff on all goods sold to the United States, with “no exclusions or exemptions,” according to CNBC and Politico. Politico reported that the White House did not immediately explain what legal authority it would use to enforce that threat. (cnbc.com) (politico.com) The United Kingdom’s position is narrower and more practical: keep existing trade flowing while trying to fence off a few sensitive sectors from future tariff fights. For chipmakers and companies that depend on chips, the next step is whether the unfinished Economic Prosperity Deal turns that opening into a written exemption. (commonslibrary.parliament.uk)