Background

The United Kingdom is considering changes to its current tariffs on imports from the U.S. in an ongoing dispute over Washington’s Section 232 tariffs on steel and aluminum products. The European Union recently announced that it would suspend such changes to foster negotiations with the U.S. on resolving the dispute.

The UK adopted the EU’s retaliatory tariffs when it formally split from the EU as of Jan. 1, 2021, but said it would undertake public consultations “to ensure these tariffs are shaped to UK interests and tailored to the UK economy.” This includes not only the existing tariffs, which cover goods such as whiskey, jeans, motorcycles, and tobacco, but also the increased tariffs the UK “will be entitled to impose” beginning in June.

The UK Department for International Trade said these consultations could result in maintaining, increasing, or decreasing the tariffs and made clear that trade relations with the U.S. will be a major consideration in deciding what action to take. The department said the review is “part of the government’s strategy to de-escalate trade tensions,” specifically by pushing the U.S. to remove the Section 232 tariffs, “so the U.S. and UK can move forward to the next phase of their trading relationship.” That could include cooperation on issues like World Trade Organization reform and China’s trade practices as well as a resumption of negotiations on a bilateral free trade agreement. FTA talks were launched under the Trump administration but have stalled under President Biden, who has said he will not negotiate additional trade deals before addressing U.S. economic problems.

Businesses and others can submit comments on the existing and potential tariffs through July 5. A list of goods that could be subject to UK tariffs can be found here and includes lobster, grapes, chocolate, orange juice, wine, shampoo, leather, wallpaper, apparel, and footwear.

For more information on the section 232 tariffs and how to mitigate their impact, please contact Nicole Bivens Collinson (at (202) 730-4956 or via email) or Kristen Smith (at (202) 730-4965 or via email).

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