Economists are warning that Donald Trump's new 10 per cent tariffs on British goods could inflict serious damage on the UK economy, with a risk of pushing it into recession. The US president has imposed the levies on the UK and several European allies in a dispute centred on his ambition to purchase Greenland from Denmark.
Greenland Gambit Sparks Transatlantic Trade War
The sweeping tariffs, announced on Monday 19 January 2026, apply to the UK, Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland. President Trump has threatened to increase the duty to 25 per cent from 1 June unless a deal is reached for the US to acquire the semi-autonomous Danish territory of Greenland.
Mr Trump, who first expressed interest in US control over Greenland in 2019, stated it was "time for Denmark to give back," adding that China and Russia's interest in the region left Denmark powerless. The affected nations have issued a joint statement affirming their solidarity with Denmark.
Prime Minister Sir Keir Starmer condemned the move, stating the government would take the matter up directly with the Trump administration. "Applying tariffs on allies for pursuing the collective security of NATO allies is completely wrong," Sir Keir said.
Key UK Export Sectors in the Firing Line
The tariffs will directly hit some of Britain's most valuable exports to the United States. The sectors facing immediate higher costs include:
- Cars and other road vehicles
- Medicines and pharmaceutical products
- Machinery and transport equipment
- Scientific equipment, non-ferrous metals, and organic chemicals
Official data underscores the high stakes. In the 12 months to November, the US bought £27.8bn of UK machinery and transport equipment, £16.7bn of cars, £14.3bn of chemicals, and £10.8bn of pharmaceuticals. Between July 2024 and July 2025, the US was the UK's largest trading partner, accounting for 17.8 per cent of total UK trade.
Recession Warnings and Damaged Competitiveness
Trade experts have sounded the alarm on the severe consequences for an already fragile UK economy. William Bain, Head of Trade Policy at the British Chambers of Commerce, said the new tariffs were "more bad news for UK exporters" already grappling with levies imposed last year.
Marco Forgione, Director-General of the Institute of Export and International Trade, warned the impact would be "huge." He told The Telegraph that the tariffs could "tip the UK into recession" by making British goods suddenly uncompetitive in the critical US market. This comes at a time of "very anaemic growth" for the UK economy.
The tariffs mark a sharp reversal from previous cooperation. Last year, the US and UK reached an agreement that saw a 10 per cent levy imposed on most UK goods, but the new blanket tariffs represent a significant escalation.
President Trump has used similar tactics against other nations, having threatened China with tariffs as high as 145% in 2025 over rare earth metals, later reducing them. India also faced 50% tariffs due to its imports of Russian oil, though with some exemptions.
