U.S. tariff drag

The United States now applies tariffs to most goods imported from Britain, leaving a 10% baseline in place even after a 2025 U.S.-UK deal carved out relief for a few sectors. (commonslibrary.parliament.uk) President Donald Trump’s tariff push hit the UK in stages: a 25% tariff on steel, aluminum and related products on March 12, 2025, then a 10% baseline tariff on most other UK goods from April 2025. Britain and the U.S. announced an Economic Prosperity Deal on May 8, 2025, but the House of Commons Library says most UK exports still face that 10% charge. (commonslibrary.parliament.uk) The June 17, 2025 White House fact sheet said the deal gave the first 100,000 UK-built cars a 10% U.S. tariff rate, offered aerospace relief, and set up tariff-rate quotas for British steel and aluminum. Goods outside those carve-outs stayed under the broader tariff regime. (whitehouse.gov) A tariff is a tax on imports paid at the border by the importing business, not by the foreign government. The House of Commons Library said those taxes have fed a “much more uncertain outlook for world trade” since Trump returned to office on January 20, 2025. (commonslibrary.parliament.uk) The Budget Lab at Yale estimated on April 2, 2025 that Trump’s April tariff announcement alone would cut U.S. real gross domestic product growth by 0.5 percentage points in 2025. Its broader estimate for all 2025 tariffs was larger: a 0.9-point hit to 2025 growth and a 2.3% short-run rise in the U.S. price level. (budgetlab.yale.edu) That same Yale analysis put the average household consumer loss from all 2025 tariffs at about $3,800 in 2024 dollars, with annual losses of $1,700 for households at the bottom of the income distribution. A separate February 2026 estimate from the Joint Economic Committee minority said U.S. consumers paid $231.35 billion in tariff costs between February 2025 and January 2026, or about $1,744.75 per family. (budgetlab.yale.edu) (jec.senate.gov) International forecasters cut growth expectations after the April 2025 tariff wave. The House of Commons Library said the World Trade Organization downgraded its projections for both global trade and economic growth on April 16, 2025 after the U.S. imposed tariffs on almost all goods imports. (commonslibrary.parliament.uk) The legal footing shifted again on February 20, 2026, when the Supreme Court ruled 6-3 that the International Emergency Economic Powers Act did not authorize tariffs, according to the Tax Foundation. The group said Trump then imposed a new 10% tariff on nearly all countries under Section 122, effective February 24, 2026, keeping a broad import tax in place while other tariff investigations continued. (taxfoundation.org) The Tax Foundation estimated the remaining Section 232 and Section 122 tariffs would reduce long-run U.S. gross domestic product by 0.2% and raise taxes by about $600 per U.S. household in 2026. It also said the average effective U.S. tariff rate reached 7.7% in 2025, the highest since 1947. (taxfoundation.org) For Britain, the result is narrower than a full trade war but wider than a one-off metal dispute: cars, steel, aluminum and aerospace now sit under special rules, while most other exports still face a 10% U.S. tariff. For U.S. buyers and businesses, the central effect has stayed the same from 2025 into 2026: imported goods cost more, and the drag shows up in prices, supply chains and growth forecasts. (commonslibrary.parliament.uk) (budgetlab.yale.edu)