However, Mr Vance’s comments suggest that a trade deal could be found.
“The president really loves the United Kingdom,” he said. “He loved the Queen. He admires and loves the King. It is a very important relationship.
“He’s a businessman and has a number of important business relationships in [Britain]. But I think it’s much deeper than that. There’s a real cultural affinity. And, of course, fundamentally, America is an Anglo country.
“I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries.”
With tariffs being imposed on countries worldwide, here’s a look at what they are and their effect.
Tariffs are taxes imposed on imported products, usually calculated as a percentage of the price paid by the buyer to a foreign seller. Governments often use them to protect domestic industries, control trade balances, or generate revenue.
For example, a US company purchasing a product from a UK supplier would now face an additional 10% charge, added to the original price. This extra cost could affect the final product price for consumers and may impact international trade relationships.
The companies importing goods are responsible for paying tariffs. In this case, US firms will face higher costs when purchasing international products. This policy is part of President Trump’s strategy to encourage domestic manufacturing, aiming to reduce reliance on imports and avoid tariffs.
However, these increased costs are often passed on to consumers, who ultimately bear the burden of the tariff through higher prices for imported goods.
Top countries for UK exports of goods and services
PA Graphics
Tariffs are collected by the customs authority of the country receiving the goods. In the UK, tariffs are paid to His Majesty’s Revenue and Customs (HMRC) when goods enter the country.
In the US, Customs and Border Protection agents collect tariffs at ports of entry, including airports and seaports.
Despite the significant changes in US tariff policy, the process of collecting these taxes will remain the same.
How are tariffs typically calculated?
Tariff costs are determined by a product’s 10-digit HTS (Harmonised Tariff Schedule) code, an internationally recognised system customs officials use to classify goods. Every product is assigned a specific code based on its characteristics, which is required for importing goods.
Duty and tariff rates are based on these classifications, and companies can face penalties for misdeclaring products or their details. Firms must also provide a certificate of origin to confirm the country where the product was made.
US tariffs vary widely depending on the country of origin, with rates ranging from 10% for most UK items to 104% for some Chinese products. This variance affects buyers’ cost. For example, a product made in the UK but incorporating components from a higher-tariff country, including China, may still qualify for the lower UK tariff rate.
What do they mean for UK exporters?
UK exporters do not directly pay the cost of the tariff, but they are still significantly impacted. Imposing tariffs usually makes their products more expensive in foreign markets, which can reduce competitiveness.
As a result, firms exporting to tariff-affected countries may face a difficult decision: either lower their prices to remain competitive, relocate production to the target country, or focus on markets with fewer or no tariffs.
Some companies, like JCB, have already announced plans to increase production in the US to sell more goods there without being affected by tariff rules.
Will all imports from the UK be affected?
Under the new rules, goods exported from the UK to the US generally face a blanket 10% tariff. However, certain products are subject to different rates. For example, all cars imported into the US are hit with a specific 25% tariff, and a similar tariff on car parts is expected to come into effect next month.
Additionally, the US has imposed a 25% tariff on all steel and aluminium imports.
That said, some items are exempt from these new tariffs, including pharmaceuticals, semiconductors, copper and certain types of lumber.
A potential trade deal, as discussed by Mr Vance, could offer a more favourable agreement for the UK as a whole or for specific industries. While the details of such a deal remain unclear, Trump has previously mentioned that he is “looking at something to help some of the car companies”.
Content Source: www.standard.co.uk