Donald Trump’s threat to slap tariffs on UK imports over Greenland could cost the food and drink sector as much as £800m in extra costs and lost business, trade expert Marco Forgione has warned.
UK food and drink businesses are bracing for more tariff turbulence after Trump announced plans to slap a 10% levy on all imports from the UK and seven other European countries over the weekend.
In a move that looks like it could spark fresh fears of a transatlantic trade war, the tariffs are due to come into force on 1 February. They will apply to the UK, Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland.
The tariffs would then rise to 25% from 1 June, said the US president on Saturday, and come in response to the opposition of the eight European nations to Trump’s threat to annexe Greenland.
Trump said the levies on transatlantic exports would be be “due and payable until such time as a deal is reached for the complete and total purchase of Greenland”. The president has long coveted Greenland and has ramped up rhetoric over a US takeover of the territory in recent weeks – claiming it is the only way to ensure the security of both the US and Europe, against the threat of China and Russia.
The impact of the tariff package and any retaliatory action could leave UK food and drink businesses facing a financial “hit” of between £500m and £800m, according to Institute of Export & International Trade director general Forgione.
“I’ve spoken to food and drink businesses [since the announcement] and a lot who are exporting to the US are now looking to see if they can frontload exports and get product over there before 1 February,” he told The Grocer.
“This is a really difficult situation for exporters, and it means they will be less competitive,” he added.
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But unlike Trump’s ‘Liberation Day’ tariff announcement last year, the Greenland issue was “different”, as it was “entirely unrelated to national trade, production or perceived market protection activities”, Forgione said.
“With ‘Liberation Day’, Trump felt that there were discriminatory practices in access to the EU market for goods and services. But this time it is entirely related to the governance of Greenland, so we are in a new era where trade is being used as a significant lever in geopolitical negotiations.”
Trump also warned the eight affected countries – all of which are NATO partners of the US – were playing a “very dangerous game” after sending military representatives to Greenland last week.
His announcement prompted a stern response by prime minister Keir Starmer, who followed comments on Sunday that Trump’s move was “completely wrong”, by reiterating this morning that the use of tariffs against allies “is not the right way to resolve differences within an alliance”.
In a press conference where the PM also insisted the “future status of Greenland belongs to the people of Greenland and the Kingdom of Denmark alone”, Starmer added it was not “helpful to frame efforts to strengthen Greenland’s security as a justification for economic pressure”.
He pledged to work with Trump, European leaders and NATO “to find a solution rooted in partnership, facts and mutual respect”, while stressing “a trade war is in no one’s interest and my job is to act always in the UK’s national interest”.
European leaders have been firmer still, with Danish PM Mette Frederiksen yesterday saying “Europe won’t be blackmailed” by Trump’s tariff threats. The EU is reportedly discussing the preparation of a package of retaliatory measures.
A statement by the European Council and European Commission on Sunday said tariffs would “undermine transatlantic relations and risk a dangerous downward spiral. Europe will remain united, co-ordinated, and committed to upholding its sovereignty”.
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