Trump's tariffs may lower UK energy bills, according to Martin Lewis, but it's predicted to be a minimal effect.
Unconventional Take on Trump's Energy Tariffs and Their Effect on UK Household Bills
Donald Trump's controversial trade tariffs are causing a ripple effect in global energy markets, and UK residents may reap the benefits, albeit modestly.
Martin Lewis, the brainchild behind MoneySavingExpert, suggests that the Trump factor is responsible for a decrease in wholesale energy prices, which could mean a minor drop in domestic bills this summer.
The shift in energy prices stems from Trump's latest policy move: sweeping new tariffs on imports into the United States. Contrary to its proclaimed purpose of protecting American manufacturers, this economically disruptive decision has triggered a wave of global uncertainty, affecting energy prices as well.
"Trump's tariffs have certainly been an economic disruptor," Lewis commented, adding that these tariffs have spawned fears of a recession, both in the US and globally. Lower predictions for demand, particularly for oil and gas, have contributed to dwindling wholesale prices, setting the stage for the 'Trump effect' to seep into UK energy costs.
Lewis forecasts a 6%-8% decrease in the Energy Price Cap for July 2025, primarily due to a sharp drop in wholesale gas prices. However, he warns that households won't see savings on the same scale because the cap is calculated using a lagged three-month average.
According to him, only "one or two percent" of the upcoming cap cut is directly due to what he calls the "Trump effect." While this impact is real, Lewis stresses it's minimal—barely enough to compensate for the 6.4% rise experienced in April 2025.
Could continued economic turmoil in the US lead to even bigger savings for UK customers? Possibly. But any significant savings would be slow in coming, with the lagging nature of the UK's energy price system.
However, if prices remain low, substantial savings may be realized in the October 2025 and subsequent January 2026 energy price caps. That said, it's merely a speculative outlook, as Lewis himself points out.
While President Trump's trade policy has unexpectedly cooled global energy markets, UK consumers can't expect substantial savings in the near future. Lewis concludes with a friendly word of caution for those getting too excited by graphs showing energy prices plummeting: "It will bring prices down, but it ain't going to be bringing them down a lot—not unless something far more drastic happens. Sorry to be the bearer of bad news."
In summary, the indirect effects of Trump's tariffs add to the volatility and supply chain challenges in both the short and long term, counteracting UK government efforts to bring down energy costs. However, some near-term relief can be expected from regulatory steps like the lowering of Ofgem’s energy price cap.
- Martin Lewis, despite the modest benefits, believes that the drop in domestic energy bills this summer in the UK could be due to the decrease in wholesale energy prices resulting from a combination of factors, including Trump's tariffs on imports and lower global energy demand triggered by uncertainties caused by these tariffs.
- Despite the unconventional importance of sports in this context, the ongoing economic turmoil in the US, as sparked by Trump's tariffs, may indirectly influence energy prices in the UK, potentially leading to significant savings for consumers in the long run, such as in the energy price caps of October 2025 and January 2026.
- While designating a guide for navigating through the complexities of Trump's tariffs' impacts on UK energy bills, Lewis warned that even though these tariffs may contribute to a minor drop in wholesale energy prices this summer, UK consumers should not expect substantial savings in the near future, as the price system has a lagging nature, and other factors come into play as well.
