Fri, 14 Feb 2025

Fri, 14 Feb 2025 Trump tariff VAT threat raises fears of hit to UK

The surprise inclusion of VAT to calculate tariffs prompts questions over the possible impact on British businesses.

* The UK could be exposed to higher trade taxes after President Trump announced plans to target Value Added Tax (VAT) in his latest move.
* The US is developing "reciprocal tariffs" for individual countries, including the UK and EU, based on their trading relationships with the US.
* Analysts warn that tariffs of 20% or more could be imposed on the UK, particularly for goods like cars, pharmaceuticals, and food and drink.
* The British Chambers of Commerce (BCC) says specific industries will be "significantly hit" by the measures.
* Trump's administration has justified imposing tariffs based on trade surpluses, but VAT is now being used as a factor in calculating potential tariffs.
* If applied, the tariffs could increase costs for British businesses exporting to the US and lead to higher prices for consumers.
* The UK government is urging caution, saying it will wait before reacting to the announcement.
* The impact of Trump's plans remains uncertain, but experts warn that the introduction of VAT into the equation complicates matters.
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