The Merits of a Legal Challenge to U.S. “Liberation Day” Tariffs in the UK: By Sarah Noble

Introduction

This article will address the merits of a potential challenge to the United States tariffs under President Donald Trump’s “Liberation Day” executive order of 2 April 2025. These include a 10% general tariff on all UK imports into the U.S. effective from 5 April 2025 and industry-specific additional tariffs, such as a 25% tariff on automobiles effective from 3 April 2025.[1]

I will evaluate the chances of challenging these tariffs under international trade law, with specific reference to World Trade Organisation (WTO) regulations, and consider potential domestic law avenues in the UK. I will evaluate the legal basis for the tariffs, jurisdictional obstacles, and chances of success.

Background

On 2 April 2025, President Trump announced “Liberation Day” tariffs, which are aimed at addressing perceived trade imbalances. The tariffs include a 10% universal tariff on every import into the U.S. and additional “reciprocal” tariffs on specific nations, with the UK facing the baseline 10% tariff.[2] The tariffs were justified by the White House under the International Emergency Economic Powers Act (IEEPA) of 1977 on the basis of a “national emergency” due to trade deficits and unfair trade practices.[3] Further tariffs target specific industries, including a 25% duty on foreign-made cars, impacting the UK’s automotive industry which exported £6.4 billion in cars to the U.S. in 2023.[4]

Post-Brexit, the UK negotiates trade independently and is not subject to EU tariff responses. The UK government has indicated a preference for negotiation rather than retaliation, hoping for an “economic prosperity deal” with the U.S.[5] Nevertheless, the tariffs carry serious economic risks, with estimates that up to 25,000 UK automotive jobs are at risk.[6]

The issue is whether the UK, or entities based in the UK, can challenge these tariffs, either through international mechanisms (e.g., WTO dispute settlement) or domestic courts, and the prospects of any such challenge.

The Legal Framework

(a) International Trade Law: WTO Rules

The primary international organisation that governs tariffs is the General Agreement on Tariffs and Trade (GATT) 1994, overseen by the WTO. Key provisions that are pertinent to the “Liberation Day” tariffs are:

o   Article I (Most-Favoured-Nation Treatment): Requires members of the WTO to accord identical tariff treatment to all its members, excluding discriminatory tariffs except where required under specific exceptions.[7]

o   Article II (Schedules of Concessions): Prohibits tariffs beyond bound rates agreed to in a member’s tariff schedule, unless renegotiated on WTO terms.[8]

o   Article XI (General Elimination of Quantitative Restrictions): Restricts non-tariff barriers.[9]

o   Article XXI (Security Exceptions): Allows measures necessary for national security, but they are subject to review.[10]

The U.S. justifies its tariffs under IEEPA by asserting a national emergency due to trade deficits. In WTO terminology, this could be argued as invoking Article XXI. However, the WTO Appellate Body has clarified that Article XXI is not entirely self-judging; measures must be plausibly connected to national security and not disguised protectionism.[11]

The UK’s 10% tariff is part of a universal baseline, but higher tariffs against other countries (e.g., 34% on China, 20% on the EU) raise issues of discrimination under Article I. The U.S. claims these are “reciprocal” tariffs responding to foreign trade barriers, including VAT systems, that President Trump considers de facto tariffs.[12] This justification is questionable, as VAT is a domestic tax applied non-discriminatorily, unlike tariffs.

(b) Domestic UK Law

The Trade Act 2021 and the Taxation (Cross-border Trade) Act 2018 are domestic UK statutes that empower the government to negotiate trade agreements and take retaliatory measures.[13] However, these statutes focus on UK actions as opposed to challenging foreign actions.

A challenge in UK courts could arise if UK businesses contend that the government’s failure to respond (e.g., by retaliating or taking action under WTO law) breaches a public law duty. The European Union (Withdrawal) Act 2018 retains certain EU law principles, but post-Brexit, WTO law is not directly enforceable in UK courts unless incorporated into domestic legislation.[14]

Judicial review could be sought if the UK government’s inaction is deemed irrational or breaches legitimate expectations (e.g., to protect UK industries). Trade policy, however, is a prerogative power, and courts are reluctant to interfere without clear illegality. [15]

(c) U.S. Legal Context

The U.S. relies on IEEPA, which grants the President broad discretion to act against “unusual and extraordinary” threats to national security, economy, or foreign policy.[16] Legal challenges in the U.S., such as those by the New Civil Liberties Alliance (NCLA) and Liberty Justice Center, argue that IEEPA does not authorise tariffs because it prescribes specific actions (e.g., sanctions, asset freezes) but not tariffs. [17] These cases, filed in U.S. courts, may influence WTO arguments if they expose procedural or legal flaws in the imposition of tariffs.[18]

Potential Legal Challenges

(a) WTO Dispute Settlement

In my view, the most viable option for the UK is a WTO complaint, alleging violations of GATT Articles I and II. The process involves:

1.     The UK requests consultations with the U.S. to resolve the dispute. [19]

2.     If consultations fail, a WTO panel is formed to adjudicate.[20]

3.     Decisions can be appealed, though the WTO Appellate Body is currently non-operational due to U.S. obstruction.[21]

Merits of Claim (a):

o   With respect to an Article I violation, the differentiated tariffs (10% for UK, 20% for EU, 34% for China) appear discriminatory because they treat WTO members unequally without an express GATT exception. The U.S. may argue these are “reciprocal” measures, but reciprocity is not a recognised GATT defence unless negotiated through Article XXVIII.[22]

o   As to a violation of Article II, the 10% tariff likely exceeds the U.S.’s bound rates for UK goods, violating Article II unless justified. The U.S.’s Article XXI defence (national security) is tenuous, as trade deficits are an economic issue rather than one of security. WTO panels have considered such claims, e.g., Russia – Traffic in Transit (2019), where national security measures were reviewed for good faith.[23]

o   In an Article XXI defence, the U.S. would have to demonstrate that trade deficits represent a genuine security threat. Given the economic nature of the justification and the broad scope of the tariffs, this is unlikely to satisfy WTO scrutiny.[24]

Challenges of Claim (a):

o   The non-functional Appellate Body means panel reports may be stalled if the U.S. appeals.[25]

o   A WTO challenge could prompt U.S. escalation, as Treasury Secretary Scott Bessent warned against retaliation.[26]

o   The UK would have to quantify the impact of tariffs (e.g., job losses, export declines) to justify countermeasures if the U.S. is found non-compliant.

Likelihood of Success of Claim (a):

A WTO challenge would have strong merits due to the tariffs’ apparent violations of Articles I and II. Previous cases, such as U.S. – Steel and Aluminium (2022), found U.S. national security tariffs inconsistent with GATT, supporting the UK’s position. [27] Enforcement, however, would be questionable due to WTO procedural issues.

(b) Domestic UK Challenge

A judicial review in the UK could target the government’s failure to act (e.g., failure to present a complaint at the WTO or imposing retaliatory tariffs). Grounds might include:

o   Irrationality, as the government’s preference for negotiation over action could be deemed unreasonable if it fails to protect UK industries facing significant harm (e.g., automotive sector job losses).[28]

o   Legitimate expectation: businesses might claim they had a right to expect government protection after Brexit, in light of assurances regarding protection of trade.[29]

Merits of Claim (b)

The economic impact is significant, with the automotive sector alone facing £6.4 billion worth of exports in jeopardy. [30] This strengthens the argument for government action.

Challenges of Claim (b)

o   Courts may hold trade policy as non-justiciable, as in R (Miller) v Secretary of State (2017), where prerogative powers were upheld unless clearly unlawful. [31]

o   Causation issues, with the harm stemming from U.S. actions, not UK policy, weaken the liability of government.

o   Continuation of the government’s negotiations with the U.S. undermines irrationality claims.

o   Remedy issues: even if successful, courts are unable to compel WTO action, limiting practical repercussions.

Likelihood of Success of Claim (b)

A domestic challenge is unlikely to succeed due to judicial deference and the political nature of trade policy. The proactive initiative of the government further diminishes the chances of establishing irrationality.

(c) Supporting U.S. Legal Challenges

UK businesses could support U.S.-based challenges, such as those brought by NCLA and Liberty Justice Center, which argue that IEEPA does not authorise tariffs. [32] If U.S. courts invalidate the tariffs, they would become invalid globally, to the benefit of the UK.

Merits of Claim (c)

The U.S. lawsuits have a plausible basis, as the language of IEEPA does not explicitly refer to tariffs, and recent Supreme Court rulings (e.g., Loper Bright Enterprises v Raimondo (2024)) limit executive deference. [33] However, these cases are in the early stages, and the U.S. judiciary may be hesitant to curtail presidential authority in trade.[34]

Challenges of Claim (c):

UK entities have no standing in U.S. courts, limiting their role to amicus briefs, lobbying, or indirectly supporting plaintiffs through advocacy or funding. Success is uncertain, given IEEPA’s broad language and political considerations.

Likelihood of Success of Claim (c)

The U.S. challenges have moderate prospects, but their implications for UK interests depend on unpredictable judicial outcomes.

Strategic Considerations

The most robust legal remedy in my view is a WTO complaint given the tariffs’ likely GATT violations. The UK could join similarly disadvantaged nations (e.g., EU, China) in a concerted effort to strengthen the case and share costs.[35] However, the UK must weigh the possibility of U.S. retaliation and delayed WTO enforcement action.

The UK’s current strategy of negotiating a trade deal may mitigate tariff impacts without legal confrontation. A deal could involve concessions (e.g., revising the UK’s digital services tax), but this risks domestic political backlash.[36]

The UK could retaliate with tariffs, as the EU plans to retaliate against U.S. steel, textiles, and tech revenues.[37] However, Starmer’s “calm, pragmatic” approach suggests reluctance, as retaliation could escalate tensions and harm consumers.[38]

The economic cost of the tariffs (e.g., 25,000 automotive jobs threatened) justifies action, but the UK has to balance legal costs against negotiation outcomes. A WTO challenge could take years, while tariffs are already in effect.[39] Negotiations could aim to secure a tariff carve-out, exempting UK goods from the U.S. tariffs, as Canada and Mexico achieved for steel tariffs in 2019.[40]

Conclusion

A WTO challenge offers the strongest legal merits, with a strong likelihood of establishing GATT violations (Articles I and II) due to the tariffs being discriminatory and not justified by credible national security justification. However, WTO procedural issues and risks of U.S. retaliation reduce enforcement prospects. A UK domestic challenge is unlikely to succeed due to judicial deference and ongoing negotiations by the government. Supporting U.S. legal proceedings is a secondary option but hinges on uncertain outcomes.

If challenge was sought, I would propose pursuing a WTO complaint, ideally in coordination with other nations, while continuing negotiations to secure a tariff carve-out. This dual approach would maximise legal and diplomatic leverage.

[1] The Guardian, “Trump’s ‘liberation day’ tariffs: what’s at stake for UK and EU?” (2 April 2025).

[2] Sky News, “What are Donald Trump’s tariffs and how does it all affect the UK?” (5 April 2025).

[3] POLITICO, “Trump’s tariffs could face more than one legal challenge” (4 April 2025).

[4] Sky News, “What are Donald Trump’s tariffs and how does it all affect the UK?” (5 April 2025).

[5] LBC, “‘Liberation Day’ explained: What are Trump’s tariffs and how will they impact the UK?” (2 April 2025).

[6] ITV News, “Donald Trump unveils ‘liberation day’ tariffs including 10% on British goods” (3 April 2025).

[7] General Agreement on Tariffs and Trade 1994, Art. I (WTO).

[8] Ibid., Art. II.

[9] Ibid., Art. XI.

[10] Ibid., Art. XXI.

[11] WTO, Russia – Measures Concerning Traffic in Transit (2019), WT/DS512/R.

[12] BBC News, “Trump tariffs: Three big unknowns ahead of president’s ‘Liberation Day’ announcement” (1 April 2025).

[13] Taxation (Cross-border Trade) Act 2018, s. 13; Trade Act 2021, s. 2.

[14] European Union (Withdrawal) Act 2018, s. 6.

[15] R (on the application of Miller) v Secretary of State for Exiting the European Union [2017] UKSC 5.

[16] International Emergency Economic Powers Act, 50 U.S.C. §§ 1701–1706.

[17] The Washington Post, “As Trump tariffs sink in, conservatives challenge whether they’re legal” (5 April 2025).

[18] Forbes, “Can Trump’s Tariffs Be Undone In Court?” (15 April 2025).

[19] WTO, Dispute Settlement Understanding, Art. 4.

[20] Ibid., Art. 6.

[21] WTO, “Appellate Body Crisis” (2020–present).

[22] GATT 1994, Art. XXVIII.

[23] WTO, Russia – Traffic in Transit (2019), WT/DS512/R.

[24] WTO, United States – Certain Measures on Steel and Aluminium Products (2022), WT/DS544/R.

[25] WTO, “Appellate Body Crisis” (2020–present).

[26] BBC News, “Trump tariffs: ‘Worst offenders’ around world face high import taxes” (2 April 2025).

[27] WTO, United States – Certain Measures on Steel and Aluminium Products (2022), WT/DS544/R.

[28] Sky News, “What are Donald Trump’s tariffs and how does it all affect the UK?” (5 April 2025).

[29] R (Coughlan) v North and East Devon Health Authority [2001] QB 213.

[30] Sky News, “What are Donald Trump’s tariffs and how does it all affect the UK?” (5 April 2025).

[31] R (Miller) v Secretary of State [2017] UKSC 5.

[32] Liberty Justice Center, “Lawsuit Challenging Executive Authority to Unilaterally Impose ‘Liberation Day’ Tariffs” (14 April 2025).

[33] Loper Bright Enterprises v Raimondo 144 S. Ct. 2244 (2024).

[34] Forbes, “Can Trump’s Tariffs Be Undone In Court?” (15 April 2025).

[35] The Guardian, “Trump’s ‘liberation day’ tariffs: what’s at stake for UK and EU?” (2 April 2025).

[36] LBC, “‘Liberation Day’ explained: What are Trump’s tariffs and how will they impact the UK?” (2 April 2025).

[37] The Guardian, “Trump’s ‘liberation day’ tariffs: what’s at stake for UK and EU?” (2 April 2025).

[38] LBC, “‘Liberation Day’ explained: What are Trump’s tariffs and how will they impact the UK?” (2 April 2025).

[39] ITV News, “Donald Trump unveils ‘liberation day’ tariffs including 10% on British goods” (3 April 2025).

[40] BBC News, ‘US lifts steel and aluminium tariffs on Canada and Mexico’ (17 May 2019).