British tariffs on cold-water shrimp, blueberries and construction equipment have all been highlighted by American businesses as examples of unfair trading practices by the UK as President Trump prepares to impose reciprocal tariffs next week.
Trump has described April 2 as “liberation day”, when he will unveil a range of tariffs aimed at punishing countries the US believes are guilty of trade practices that unfairly restrict its exports.
Yet with less than a week to go, many of the details around the planned reciprocal tariffs remain unclear.
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In response to a consultation by the US government, a number of American businesses took issue with the UK’s trade policies.
The Oregon Trawl Commission, representing the state’s fishing industry, said that a range of UK tariffs on shrimp and prawns put American fishermen at a “severe disadvantage”, exacerbating an ongoing trade deficit.
The UK government imposes a third-country duty ranging from 12 per cent to 18 per cent on a number of species of cold-water shrimp. For example, the UK’s tariff schedule specifies an 18 per cent levy on the species Crangon crangon.
The group urged the administration to impose a 20 per cent tariff on UK seafood imports if it did not grant the US fair market access.
The North American Blueberry Council voiced its disappointment that even though the UK had left the EU, it had kept levies on US blueberries and related products largely in place.
The UK’s duties on blueberries vary from product to product. Fresh blueberries face a 2 per cent third-country duty, while frozen, sweetened blueberries — with less than 13 per cent sugar by weight — are subject to a 20 per cent levy.
The American Peanut Council said the inspection rate on US peanut exports to the UK had also failed to change since it had left the EU.
Food was not the only product in the sights of US business. Several groups pointed to what they considered to be unfair support for heavy machinery manufacturers.
The trade body for US manufacturers of machinery such as scissor lifts said the UK imposes a 4 per cent tariff on such equipment, while the US has no tariffs on UK exports.
Vermeer Corporation, a multinational manufacturer of agricultural machinery, accused the government of Northern Ireland of providing “extraordinary” targeted support to its heavy industrial equipment sector.
This support, which the company said came in the form of unfair tax, labour and research and development rules, had hampered US access to the EU market for such machinery and led to more than 7,000 job losses in the US, it added.
Most curiously, Sid Miller, head of the Texas Department of Agriculture, suggested in a wide-ranging submission — which touched on topics as diverse as artificial intelligence and China’s role in the pandemic — that the UK’s spot in the G7 group of leading industrialised nations should be taken up by Russia.
The UK was far from the only country criticised by American businesses. China, India and Vietnam received the most complaints out of nearly 800 submissions to the consultation.
“Broadly speaking, the US is all right with the UK — the UK is not top of its list of countries that it’s annoyed with, because we have broadly balanced trade,” said Sam Lowe, a trade expert and partner at Flint Global, the consultancy.
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However, Trump and his advisers deem the UK guilty of two discriminatory trade practices in particular: its value-added tax and digital services tax. Both levies have been included in recent executive orders by the president.
Justin Whitehouse, managing director at Alvarez & Marsal Tax, who specialises in global indirect tax services, said: “Most VAT professionals would find it odd that [it’s considered a trade barrier].
“Most of the focus on why people think Trump and his team think it’s a barrier is because it’s often payable at the time of import.”
At the same time, Whitehouse added that there has been a body of academic thought, albeit small, that since exporters effectively receive a refund on VAT, it amounts to an unfair export subsidy.
The idea of VAT as a trade barrier “probably originally came from this notion that VAT was an export subsidy and then it’s got blended with the fact it’s also a tax on imports, so it sounds like a tariff,” Whitehouse said.
“The equivalent US sales tax is principally only levied at the end-consumer, not along the chain, and the rates are a lot lower, whereas our rates are high. So it sounds bad.”
While the government has shown little interest in reforming VAT given its importance to the exchequer, it has suggested more flexibility around the digital services tax.
Intended to ensure that large multinational digital companies pay tax that fairly reflects the value of business they derive from UK customers, the tax is charged at 2 per cent on the revenues of digital companies with global sales in excess of £500 million.
Rachel Reeves, the chancellor, confirmed last Sunday that the government was talking to the US about the future of the digital services tax, which is worth roughly £800 million a year to the Treasury, and pointedly refused to guarantee that it would remain.
“It’s more logical that they see this as being objectionable,” Whitehouse said, adding that it was the nearest the UK had to a tariff on an imported service.
“That doesn’t mean I disagree with the tax, but I can see that it feels like a specific tariff or burden that is most likely felt by US west coast tech businesses.”
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On Thursday Jonathan Reynolds, the trade secretary, also refused to rule out scrapping the tax, saying it had not been created in such a way that it could “never change”.
Few concrete details have emerged around the structure or scope of the reciprocal tariffs, although Scott Bessent, the US Treasury secretary, suggested that America might focus on nations deemed most responsible for unfair commercial practices.
Without specifying the trading partners, Bessent recently told Fox News that 15 per cent of countries accounted for “a huge amount of our trading volume” and implied that they could be the focus of any reciprocal tariffs.
Trade data suggests that these would include China, India and Vietnam but would not include the UK. In any case, Trump has recently suggested that rates could be lower than expected.
“We’re going to make it all countries and we’re going to make it very lenient,” Trump said on Wednesday in the Oval Office. “I think people are going to be very surprised. It’ll be, in many cases, less than the tariff that they’ve been charging us for decades.”
He added: “We have not been treated nicely by other countries, but we’re going to be nice. So I think people will be pleasantly surprised.”
