[co-author: Laurianne Strang]
On April 2, 2025, President Donald Trump announced broad “reciprocal” tariffs, including a 10% tariff on most UK products imported into the U.S. and a 20% tariff on most EU products imported into the U.S., with some notable exceptions for specific categories such as semiconductors and pharmaceuticals.
The UK and the EU have begun formulating their responses to the tariffs imposed by the U.S. While the UK is still assessing its options and consulting with British businesses, the EU has already moved forward with plans to impose retaliatory tariffs on U.S. goods.
However, on April 9, 2025, the U.S. announced an easing of its planned 20% tariff for most countries – and the EU – reducing the “retaliatory” tariff to 10% for a period of 90 days. In turn, the EU also suspended its planned retaliatory tariffs for that period. Given the UK’s “reciprocal” tariff was already set at 10%, it is unaffected by this 90 day temporary easing.
We note that there are separate “product specific” higher tariff rates applicable to certain UK/EU (and most other country) products imported into the U.S. (for example, steel, aluminium and automotive products), which continue to apply notwithstanding the separate “reciprocal” tariff position.
Below is an overview of the UK and EU responses to the U.S. tariffs, including the actions they are considering and the steps they are taking to address the evolving situation.
The UK’s response
The UK finds itself in a delicate situation. Prior to the U.S. announcement of a “reciprocal” tariff on UK products, the UK government had suggested there was no immediate plans to impose retaliatory measures and the UK government was focused on securing a favourable trade deal with the U.S. that it hoped would mean it’d avoid a “reciprocal” tariff. However, with the U.S. moving forward with its tariffs, the UK government has seemingly reconsidered this position.
At present, there has been no formal announcement of UK retaliatory tariffs. However, the UK government has launched a consultation with British businesses to assess potential retaliatory counter-tariffs on U.S. products. This consultation seeks feedback from UK businesses on various factors, including the value of their U.S. imports, the potential effect of any retaliatory tariffs on U.S products and the way businesses might adjust to any such new trading conditions. The consultation will remain open until 1 May 2025.
An indicative list of U.S. products that could be subject to UK retaliatory tariffs has already been published and can be found here. The final list will depend on the outcome of the consultation and ongoing negotiations.
Northern Ireland’s position
The position of Northern Ireland is unique. Under the Northern Ireland Protocol/ Windsor Framework, whilst Northern Irish exports to the U.S. are subject to the U.S. 10% tariff on UK products, imports to Northern Ireland from the U.S. will be subject to any EU retaliatory tariffs on U.S. products. The UK does however have a compensation scheme which could be used to off-set this difference in costs for Northern Irish businesses.
This creates a complex situation for the UK, as Northern Irish businesses find themselves caught between two different tariff systems, complicating trade and potentially increasing costs for companies operating in the region.
The EU’s response
The European Union has reacted to the new U.S. “reciprocal” tariffs with plans for additional retaliatory tariffs (beyond the reintroduction and calibration of those suspended since 2021). Following U.S. President Donald Trump’s decision to reduce tariffs for the next 90 days, the European Commission suspended its planned countermeasures for 90 days, until 14 July 2025, to allow time for negotiations. Ursula von der Leyen, President of the European Commission made it clear that if these discussions do not lead to satisfactory outcomes, the EU would introduce its retaliatory tariffs. However, Ursula Von der Leyen welcomed the tariff pause, describing it as an important step for global economic stability and reaffirming the EU’s readiness to negotiate a trade agreement with the U.S.
More broadly, the EU's new Anti-Coercion Instrument could be used to restrict access to the EU market in services. Whilst the EU has a trade surplus with the U.S. in goods, the U.S. has a trade surplus with the EU in services. Use of the Anti-Coercion Instrument requires a qualified majority, being 55 percent of the EU’s twenty-seven member states representing at least 65 percent of the EU’s population.
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