The UK government is engaging in urgent talks with the United States after Donald Trump announced a new round of tariffs that specifically targets sectors left unprotected by previous agreements. The British pharmaceutical industry is facing the most severe threat, with a proposed 100% duty on branded drugs that could cripple a vital part of the nation’s economy.
This crisis highlights the shortcomings of the tariff deal Keir Starmer struck with the US five months ago. While that agreement provided a shield for the car, steel, and aerospace industries, it left pharmaceuticals exposed. A government spokesperson admitted this latest development is “concerning for industry” and confirmed that diplomatic channels are fully engaged to avert the impending duties, which are set to take effect on October 1st.
The tariff announcement came as a shock, particularly following a high-profile state visit by Trump that was intended to bolster the “special relationship.” Despite the pomp and ceremony, including a banquet at Windsor Castle attended by industry leaders, the UK was unable to secure any guarantees for its pharmaceutical sector. Trump’s earlier pledge of “preferential treatment” now rings hollow.
While the situation appears dire, some analysts speculate that the tariffs are a tactic to boost domestic manufacturing in the US. Companies that are already building or operating plants in America, such as several major European pharmaceutical firms, are expected to be exempt. This suggests a strategic, rather than a blanket, application of the new rules, offering a potential escape route for some but cold comfort for those without a US footprint.
Beyond pharmaceuticals, the new tariffs will also hit European truck makers with a 25% levy and cabinet makers with a 50% rate. The German auto trade body has vigorously protested, arguing that the tariffs will backfire by weakening supply chains and increasing costs for American consumers. The broad scope of the tariffs indicates a significant escalation in trade tensions, with Mexico also identified as a country that could be heavily affected by the duties on trucks.