On 24 July 2026, the United States imposed new tariffs of 10% and 12.5% on goods from 60 trading partners, citing those countries' failure to curb trade in goods produced using forced labour. The duties cover 99.4% of all US imports, according to Reuters. The UK government said the decision meant "no direct negative change" for British businesses, Reuters reported.

Both the UK and the EU each face a 10% tariff rate from the US, but the structures differ. The EU's 10% is a flat rate; the UK's 10% applies alongside additional tariffs on goods including footwear and textiles, as BBC economics editor Faisal Islam reported in his analysis article "The UK's Trump trade deal no longer looks world-beating," BBC News reported. The trade-weighted effective tariff rate — a measure that accounts for the actual volume of trade affected by each tariff, giving a more realistic picture than a headline rate — could end up around 8.5% for the EU, compared with the UK's 6.8%, Islam reported.

The gap in effective rates stems from a specific policy divergence. The EU has passed a ban on forced-labour goods, which the UK has not done. That legislative move secured the EU better US tariff treatment. William Bain, trade expert at the British Chambers of Commerce, said EU exporters into the US now have a competitive advantage in some sectors, BBC News reported.

How the UK got here

The US-UK Economic Prosperity Deal was implemented as a presidential tariff action dated 17 July 2025, according to USTR. The deal is a non-binding agreement that seeks to lessen the impact of US tariffs on the UK, the House of Commons Library noted. Tariff cuts for UK aerospace goods took effect, and the tariff rate for British car exports to the US was reduced from 27.5% to 10%, GOV.UK confirmed. The UK government also struck side deals with the US on medicines, steel, aluminium, and cars. King Charles helped secure a side deal on whisky tariffs.

In February 2026, a Trump trade official stated the US would not back out of tariff deals already sealed with the UK, the EU, Japan, and Switzerland, The Guardian reported. That commitment held. But the competitive advantage the UK gained from being first to strike a deal with Trump, combined with post-Brexit trade freedoms, appears to have been short-lived. The UK's effective tariff situation remains broadly where it was; the EU's position has improved relative to the UK.

The forced-labour pivot

President Trump has sought multiple successive justifications for tariffs against allies, including the opioid crisis, illegal migration, and bringing manufacturing back to America. The latest justification accuses dozens of trade partners of trading in goods produced using forced labour. The Trump administration first proposed tariffs of up to 12.5% on imports from 60 countries on 3 June 2026, Reuters reported. That proposal became the 24 July imposition.

Islam described the approach as "tariffs in search of an authority," quoting an unnamed industry figure. Some of Trump's previous tariff justifications have been overturned by courts, others by economics, and some by their own logic. The forced-labour justification is designed to shore up the tariffs against a challenge from Congress or the courts, Islam reported.

The UK-India counterweight

While US tariff dynamics have shifted against the UK's relative position, a separate trade agreement with India entered into force on 15 July 2026, GOV.UK confirmed. Under the UK-India Free Trade Agreement, Britain will immediately remove duties on 96.8% of tariff lines — the individual categories under which goods are classified for tax at the border — covering 97.7% of trade by value, Reuters reported. India will immediately eliminate duties on 64.1% of tariff lines.

The deal delivered substantial tariff cuts. Whisky tariffs were cut from 150% to 40%. Automotive tariffs were cut from 100% to 10% under a quota. Tariffs on key agrifood products, including chocolate, biscuits, and soft drinks, will be eliminated within 10 years, according to business.gov.uk. Islam had previously reported that Trump's tariff pressure may have helped drive the UK-India deal to conclusion, BBC News reported.

What this means for UK trade strategy

The cumulative picture is awkward for ministers. The UK moved early and secured sector-specific concessions from Washington that looked meaningful at the time. But the EU's decision to legislate against forced-labour goods has now delivered a structural tariff advantage that side deals cannot replicate. The UK's 6.8% trade-weighted rate is lower than the EU's 8.5%, but the EU's flat 10% rate, free of the additional tariffs on footwear and textiles that apply to British exporters, gives continental firms an edge in exactly the sectors where the UK lacks legislative cover.

The broader context here is that bilateral deals with an unpredictable US administration offer provisional relief, not durable advantage. The forced-labour mechanism, as Islam's analysis makes clear, was built to survive judicial scrutiny in a way that earlier justifications did not. That durability cuts both ways: it locks in the tariffs, and it locks in the preference for trading partners who have matching domestic legislation.

The UK government's assessment that the latest tariffs bring "no direct negative change" is technically accurate. The UK's position has not worsened in absolute terms. It has worsened relative to the EU, and the gap is now anchored in a policy choice the UK has not made. Whether Westminster follows Brussels in legislating against forced-labour goods is a question that now sits squarely with ministers.