Trump’s Trade Strategy: Baseline Tariffs to Remain Despite UK Deal

Despite unveiling a new trade agreement with the United Kingdom hailed as an "incredible day for America," the Trump administration has affirmed its commitment to maintaining a 10% baseline tariff against all countries, signaling a potentially significant shift in global trade dynamics. The announcement, made by White House Press Secretary Karoline Leavitt, has raised questions about the long-term implications for international trade relationships and the future of trade negotiations.

According to Leavitt, President Trump is determined to continue with the 10% baseline tariff, not only for the United Kingdom but also for all other countries involved in trade negotiations. This stance suggests that the newly announced trade deal with the UK will not exempt the country from the baseline tariff, raising questions about the true scope and benefits of the agreement.

The decision to maintain the 10% baseline tariff even after trade deals are finalized has sparked debate among economists and trade experts. Some argue that the tariffs could hinder trade flows, increase costs for consumers, and potentially spark retaliatory measures from other countries. Others contend that the tariffs could serve as a bargaining chip in future trade negotiations, encouraging countries to offer more favorable terms to the United States.

The announcement of the UK trade deal, described by Trump as the first in a series of agreements negotiated over the past four weeks, has been met with cautious optimism. The agreement aims to promote reciprocity and fairness in international trade and seeks to expedite the customs process for American goods entering the UK. However, the insistence on maintaining the 10% baseline tariff casts a shadow over the potential benefits of the deal.

As of April 5, the United States had already imposed a 10% reciprocal tariff on imports from the UK, further complicating the trade landscape. Additionally, the Trump administration’s 25% global tariff on cars, implemented on April 3, affects all imported vehicles, including those from traditional US allies such as the UK. A 25% tariff on US imports of steel, aluminum, and derivative products has also been in effect since March 12.

Prior to April 2025, most UK goods exported to the US were subject to relatively low tariffs, ranging from 0 to 2.5%, with higher rates applied to specific products like steel, aluminum, and some vehicles. The UK, in turn, imposed tariffs on US imports based on the World Trade Organization’s "Most Favored Nation" (MFN) rules.

According to the most recent data available, the UK’s average MFN applied tariff rate was 3.8% in 2023. However, the UK does impose higher tariffs on certain US exports, such as rates of up to 25% for some fish and seafood products, 10% for trucks, 10% for passenger vehicles, and up to 6.5% for certain mineral or chemical fertilizers.

The decision to maintain the 10% baseline tariff despite the new trade deal with the UK could have several implications. First, it could raise the cost of goods for consumers in both countries, as importers may pass on the tariff burden to consumers. Second, it could reduce the competitiveness of businesses in both countries, as they may face higher costs compared to businesses in countries not subject to the tariff. Third, it could strain trade relations between the US and other countries, as they may view the tariff as protectionist and unfair.

The Trump administration’s rationale for maintaining the 10% baseline tariff is likely multifaceted. One possible explanation is that the administration views the tariff as a tool to incentivize other countries to negotiate more favorable trade deals with the US. By maintaining the tariff, the US can pressure other countries to offer concessions in exchange for tariff reductions.

Another possible explanation is that the administration believes the tariff will protect American industries from foreign competition. By increasing the cost of imported goods, the tariff could make domestic products more competitive, thereby supporting American jobs and businesses.

However, critics argue that the 10% baseline tariff could ultimately harm the US economy. They contend that the tariff could disrupt supply chains, raise costs for businesses, and reduce overall economic growth. They also warn that the tariff could spark retaliatory measures from other countries, leading to a trade war that would damage the global economy.

The long-term impact of the Trump administration’s trade strategy remains uncertain. The decision to maintain the 10% baseline tariff despite the new trade deal with the UK has created a complex and potentially volatile trade environment. Whether the tariffs will ultimately benefit or harm the US economy will depend on a variety of factors, including the response of other countries, the effectiveness of the tariffs in promoting American exports, and the overall health of the global economy.

The upcoming weeks and months will be crucial in determining the future of US trade policy and its impact on international trade relations. As the Trump administration continues to negotiate trade deals with other countries, the decision to maintain the 10% baseline tariff will undoubtedly be a key point of contention and negotiation.