Britain and the EU said they were assessing the implications of a US Supreme Court ruling against Donald Trump’s global tariffs, but business reacted cautiously to the court’s announcement.
A Downing Street spokesman said: “The UK government is working with the US to understand how the Supreme Court’s reversal of Donald Trump’s tariffs will affect the UK, but we hope that our special trading position with the US will continue.”
The UK is the first to sign a tariff agreement with the US, with tariffs of 10% on all imports from Britain, compared with a 15% rate for the EU.
The EU said it was analyzing the ruling as it worked to reduce US tariffs on European exports.
The EU agreed to a 15% tariff rate with the US on Trump’s Scottish golf course last July, but still has 50% tariffs on steel.
“We are in close contact with the US administration seeking clarification on the steps they intend to take in response to this ruling,” it said.
“Businesses on both sides of the Atlantic depend on stability and predictability in trade relations. That’s why we continue to work towards lower tariffs and reducing them.”
Companies affected by the tariffs should be able to demand refunds from the US administration, but the way to do this remains unclear.
It is understood that tariffs on products such as steel will remain unaffected and likely to remain so. Some experts have warned that the White House could move to broader product-based tariffs affecting computer chips and agriculture, taking a more brutal approach with higher tariffs.
John Denton, secretary general of the International Chambers of Commerce, said there was “fresh uncertainty” for companies looking to do business with the US.
“Given IEEPA’s significant pressure, many businesses welcome the possibility of refunds following today’s ruling. [International Emergency Economic Powers Act] Tariffs have been placed on corporate balance sheets in recent months.
“But companies should not expect a simple process: the structure of US import procedures means that claims are administratively complex.”
William Bain, head of trade policy at the British Chambers of Commerce, said that while the Supreme Court had made it clear that executive powers could be used to raise tariffs, it “does little to clear up the stormwater for business”.
“If he wills, [Trump] The 1974 Trade Act can be used to impose even higher tariffs than the additional 10% tariffs already imposed by the UK and Australia in many goods sectors.
“We have recently agreed a good deal on pharmaceuticals and should focus on using the Economic Prosperity Agreement to ensure the UK receives the preferential treatment outlined there.”
An aerospace industry insider said: “It’s a relief to have it announced, but I don’t think it will do much for geopolitical tensions.
“We still have a very unpredictable US administration, and I don’t think taking this kind of public punishment is going to serve some trade relations very well.”
In stock markets, UK’s FTSE 100 index hit a new intraday high after the Supreme Court verdict was announced on Friday and closed 0.56% higher.
Exporters were among the gainers, with drinks company Diageo – whose Scottish whiskey and Mexican tequila brands have been hit by Trump’s tariffs – up 3.9%. Luxury fashion brand Burberry gained 3.3%.
Some European carmakers also benefited: Stellarnis brands, which include Citroen, Fiat and Vauxhall, rose 2%.
US government bond prices fell, borrowing costs rose as investors lost revenue from tariffs and US companies could qualify for refunds on import costs. The dollar weakened slightly.
