The uncertainties facing businesses and consumers after Trump's tariff changes

British businesses selling to the United States are facing a £2-3 billion bill they thought they'd already negotiated away. After the Supreme Court blocked Donald Trump's sweeping tariff regime on Friday, the White House responded within hours by invoking different legal powers to impose new levies—first 10%, then 15%—leaving the fate of existing trade agreements, including Britain's, entirely unclear. The whiplash has been brutal, with roughly 40,000 UK companies now uncertain whether their hard-won diplomatic arrangements mean anything at all.

What makes this particularly galling for British exporters is the legal framework Trump has chosen. Section 122 of the 1974 Trade Act, which he's now relying on, explicitly requires tariffs to be applied in a "non-discriminatory manner" across all trading partners. That technical requirement may have automatically invalidated every bespoke deal struck in recent months, putting Britain right back where it started despite weeks of diplomatic manoeuvring.

The legal void where certainty used to be

William Bain, head of trade policy at the British Chambers of Commerce, describes a business community that's moved beyond concern into something closer to exhaustion. "There is a weariness about the constant changes, the lack of any clarity and certainty in terms of tariffs, and therefore the prices that companies can charge for goods in terms of customers in the US," he told reporters. His organisation's estimate—that the 15% rate will add £2-3 billion to UK export costs compared to the negotiated deal—assumes that rate applies in full.

But nobody actually knows yet. The White House said on Friday it would "continue to honour its legally binding agreements on reciprocal trade" whilst simultaneously stating that countries with existing deals would face the Section 122 global tariff. These statements cannot both be true, yet neither has been clarified since Trump announced the jump to 15%.

The very legislation Trump is using prohibits the kind of country-specific carve-outs he's suggesting might continue.

Paul Ashworth, chief North America economist for Capital Economics, has pointed out the contradiction at the heart of this arrangement. Major trading partners including the European Union and Japan appear to be exactly where they were before negotiations began. For British exporters in sectors like food and drink, textiles, industrial machinery and electrical goods, the situation has shifted from manageable to untenable overnight.

These aren't abstract policy debates—they're immediate cost pressures that businesses must either absorb or pass on to American customers, potentially pricing themselves out of a market worth tens of billions annually.

The £96 billion question nobody's answering

Behind all this sits an even thornier problem. The Supreme Court ruling that triggered this chaos didn't just block future tariffs—it rendered approximately £96 billion worth of levies collected since April legally questionable. Companies have already paid those sums under the previous framework, which the court has now deemed unlawful.

Hundreds of firms have reportedly begun filing lawsuits to position themselves for potential refunds. The White House has said precisely nothing about whether such refunds will materialise, how they might be processed, or over what timeframe. Legal experts suggest any resolution could take years.

Tim Doggett, chief executive of the Chemical Business Association and director of the Trade Association Forum, describes this as creating "further legal and contractual uncertainty, placing suppliers and customers in extremely difficult positions as they attempt to determine where liability ultimately sits—a costly and potentially protracted process".

The cruel irony here is that Trump's new tariff arrangement may serve as a legal shield against having to issue those refunds at all.

By replacing one tariff regime with another, the administration could argue that whilst the old system was struck down, a new one now stands in its place.

What comes after 15%

Section 122 gives Trump authority to maintain these tariffs for 150 days before Congress must intervene. That's the theoretical constraint. The practical one is different: Trump retains Section 232 powers that allow sector-specific tariffs without time limits.

He's already deployed these for steel and aluminium, and the Department of Commerce has launched investigations into pharmaceuticals, semiconductors, critical minerals and aircraft. Fifteen per cent may not be the ceiling—it may just be the baseline before additional industry levies stack on top.

Research published before this latest upheaval estimated that US consumers were bearing between 31% and 63% of the tariff costs through higher prices. The New York Federal Reserve found in its analysis that American businesses and consumers were covering nearly 90% of the additional levies. Those figures predate the current confusion, but the fundamental economics haven't changed—tariffs remain a tax on imports, typically paid by buyers rather than sellers.

For British exporters, the immediate challenge is simpler than any macroeconomic calculation: they cannot plan. They cannot price contracts with confidence. They cannot tell customers what goods will cost in three months. Bain reports that companies are already accelerating plans to diversify into European and Indo-Pacific markets, which may prove the most lasting consequence of the past month's turbulence.

Britain spent considerable diplomatic capital securing what it believed was clarity for its exporters. That certainty has evaporated, and Trump's Section 232 investigations suggest further volatility ahead for specific sectors. The 40,000 British firms selling to America are now operating in a legal grey zone with immediate uncertainty over applicable tariff rates, waiting to discover whether the deal they negotiated still exists.

Meanwhile, a complex battle for $175 billion in refunds looms, though most businesses and consumers are unlikely to receive compensation.