The idea of a US-led global trade war has been a hot topic for quite some time, but President Donald Trump upped the ante significantly when he announced the most recent wave of global tariffs last week Thursday.
Set to be imposed by the 5th of April (and the 9th for those impacted tariffs higher than he baseline 10%), the whole world was reeling from America’s latest move, with people from across the globe – working in any and all industries and from just about every walk of life – expected to be impacted by these restrictions in one way or another.
Some of the countries hit hardest by the updated tariffs include the Southeast Asian nations of Cambodia, Vietnam and Laos who saw trade tariffs of nearly 50%. A few more countries with arguably surprisingly high tariffs include:
- Sri Lanka: 44%
- Thailand: 36%
- China: 34%
- Madagascar: 47%
- Myanmar: 44%
- Botswana: 37%
- Mauritius: 40%
- Falkland Islands: 41%
As a result of this announcement, plenty of countries – China, most notably – didn’t waste time in responding with promises of similarly harsh reciprocal tariffs, imposing 34% tax on US goods. Furthermore, according to the BBC, Trump’s economic advisor commented that more than 50 countries have reached out to the US in the last few days attempting to discuss tariff increases.
Of course, the general expectation is that we’ll be seeing plenty more reciprocal tariffs imposed the United States in the near future, especially from those hit the hardest.
So, where does the UK stand in and amongst all this chaos?
US Tariffs Imposed On the UK
A lesser asked question has been what other countries with lower tariffs (closer to the 10% baseline) think of all this. Indeed, the UK is one such country, hit with a comparatively low 10%.
Jonathan Reynolds, UK Trade Secretary, spoke at the House of Commons shortly after the announcement, expressing disappointment in the increased tariffs, despite the fact that “the UK did receive the lowest reciprocal tariff rate globally”.
Reynolds’ response was notably measured, as he thanked several US officials for their “engagement” both leading up to and in the wake of the announcement. The two countries have been involved in intensive talks regarding their future economic cooperation.
Indeed, he went on to urge the House of Commons not to simply “follow the actions of other countries” and get involved in an escalating trade war when the UK was already benefiting from a “fair and balanced trading agreement”.
Rather, he continued to emphasise the so-called mutually beneficial agreements the US and UK already have the expected improvement of said agreements in future, contingent on a deal that is currently in the works.
That, of course, is the opinion coming from the Labour Party, very much based on ongoing discussions and agreements between the two countries. But regardless of what’s “fair” and how these tariffs compare to those imposed on other countries, they’re still going to have an influence on the economy of the United Kingdom.
How Will These Tariffs Affect the UK and What Will Keir Starmer Do Next?
There are plenty of thoughts and opinions on how the country will be impacted in real terms, with some industries in particular expected to take a serious knock. In addition to the blanket 10% imposed on the UK in particular, the US also announced a 25% global tariff on cars, affecting key sectors including automotive manufacturing, a large an important sector in the UK.
According to the Guardian, Jaguar Land Rover, for instance, exports approximately 100,000 vehicles annually to the U.S. and employs over 9,000 staff at its Solihull plant, meaning that these tariffs threaten around 25,000 British jobs in the automotive industry.
Prime Minister Keir Starmer faces a strategic decision – retaliate with counter-tariffs, aligning with other G7 nations, or exercise restraint to avoid exacerbating economic challenges and further diplomatic tension.
Retaliation could bolster domestic support but risks straining relations with both the U.S. and the EU, the latter being the UK’s largest trading partner. Additionally, the FTSE (Financial Times Stock Exchange 100 has plummeted to 6%, a one-year low amid market turmoil, reflecting growing fears of a global recession triggered by these tariffs.
The government is also adjusting policies, including easing electric vehicle sales targets, to support affected industries. The tricky part, of course, is that the situation remains fluid, with significant implications for the UK’s economic landscape. Based on past events, there’s simply no telling what Trump and the US may do next, putting the UK in an incredibly difficult position regarding their next moves.
The Impact of US Tariffs On UK Businesses: What Do Experts Think?
The thoughts and opinions of politicians and global leaders represent one of the most important aspects of the impending global trade war, but what about those directly affected?
We spoke to business leaders and experts and got their thoughts on the current situation and how they expect these tariffs to affect businesses in the UK.
Our Experts
- Nadish Lad: Head of Strategy and MD at Volante Technologies
- Allan Wilen: Economics Director at Glenigan Construction
- Calum Chace: Co-Founder of Conscium
- Kate Leaman: Chief Market Analyst at AvaTrade
- Matthew Parden: CEO of Marygold & Co.
- Thanim Islam: Head of FX Analysis at Equals Money
- Shabnam Sheikh-Waseem: Senior Lecturer at The University of Law Business School
- Guido Cozzi: Chair of Macroeconomics at the University of St. Gallen
- Scott Sherwood: Founder at TestLodge
Nadish Lad, Head of Strategy and MD at Volante Technologies
“Both proposed and in-effect changes to tariffs have UK treasurers concerned over material cost increases, cash flow disruption, and foreign exchange rate volatility. For many, there is a forced re-evaluation of supply chains, albeit squeezing more efficiency out of current partnerships or moving to favour countries with lower net tariffs. All of this will make liquidity management and foreign exchange far from a simple endeavor. Rather, careful management of working capital is required of corporate treasurers so price fluctuations don’t impact their company’s profitability and financial planning.
But corporate treasurers will also be looking for better and more flexible lending terms, which increases the banks’ interest to speed onboarding pathways to corporate payment services, as well as expand beyond basic rails and payment methods already delivered in the market. As such, businesses can expect to see their financial partners double down on new value-added services such as real-time liquidity management, payments intelligence, smart routing, all of which will help corporate treasurers to better manage their working capital 24/7.”
Allan Wilen, Economics Director at Glenigan Construction
“Overall, UK manufacturers exported £1,011 million to the US in 2023. The US was the second largest destination for UK exports, accounting for 12% of sales. However, this compares with £5,159 million or 60% of exports that are to the EU.
The vast majority of building material exports to the US and elsewhere are manufactured products and components rather than raw materials. These will be hardest impacted by the 10% tariff on UK goods, rising to 25% for aluminium and steel products.
Brexit provides an indication of the likely impact of the tariffs on UK export sales. The UK’s exit from the single market was accompanied by a 18% fall in building products and components exports to the EU in 2020 while non-EU exports dropped by just 5%.
A similar decline in US exports would represent a loss of over £130 million in overseas sales.
However, the impact on UK construction markets and material suppliers will be more widely felt. The imposition of US tariffs is likely to prompt many exporters to the US, many of whom have been hit by far higher tariffs than UK exporters, to target alternative markets such as the UK. This threatens to intensify competition and destabilise prices. UK manufacturers will need to work quickly and hard to win specifications and lock in their products used on planned projects.”
Calum Chace, Co-Founder of Conscium
“Necessity is often the mother of invention. Tariffs will curtail trade and boost inflation. Making TSMC’s chips more expensive and perhaps more scarce may provoke innovation into new types of chips, including neuromorphic chips, which offer benefits of energy consumption and flexibility. The UK has pedigree in this area, so this could be an opportunity.
If – and it’s a big if – the tariffs endure, then trade flows will re-orient away from the US. The global supply chain is complex, and dramatic changes like this normally take time. But Covid showed how a crisis can provoke much faster change than usual. A new global trading pattern in which the US plays a smaller role could enable Europe and other countries outside the US-China AI Duopoly to finally step up and play a full role in the development of the world’s most important technology.”
Kate Leaman, Chief Market Analyst at AvaTrade
“Trump’s tariff shake-up could throw global trade into turmoil, but the UK may find some silver linings. With a baseline U.S. tariff of 10% – lower than the EU’s 20% or China’s 54% – British exporters are suddenly more competitive. That opens doors for UK-made goods, especially in autos and tech, to win U.S. market share where rivals now face steeper costs. We could also see trade diversion – products priced out of the U.S. may reroute to the UK, easing inflation and boosting supply. London’s logistics, finance, and warehousing sectors might benefit as exporters look for new entry points.
That said, it’s not a free lunch. UK exporters still face 10% U.S. tariffs, and a broader global slowdown from these trade tensions could drag down growth. So yes, there’s opportunity – but it’s mixed with real risks.”
Matthew Parden, CEO of Marygold & Co.
“While President Trump’s tariffs are primarily designed to protect domestic industries by imposing duties on imports, they inadvertently create opportunities for UK consumers to benefit from potentially lower prices on certain goods. For instance, the baseline 10% and reciprocal 34% tariff on Chinese imports may lead Chinese manufacturers to redirect surplus consumer electronics, such as laptops and smartphones, to the UK market. This influx could increase competition among retailers, potentially driving down prices for UK consumers. Similarly, the tariffs on Chinese toys might result in an increased supply of these products in the UK, which could lead to lower prices as retailers compete to attract consumers.
In the steel and aluminium sectors, the US has imposed a 25% tariff on imports, which could lead to a surplus of these materials in global markets. This surplus might prompt suppliers to offer more competitive prices in the UK, benefiting industries that rely on these metals and potentially lowering costs for consumers in products like canned goods and automobiles. Moreover, the 34% tariff on Chinese textiles could result in an increased availability of textiles in the UK, as manufacturers seek alternative markets for their products. This greater supply may result in reduced prices in the UK textile and clothing markets.”
Thanim Islam, Head of FX Analysis at Equals Money
“With two thirds of businesses anticipating that rising protectionist tariffs could create favourable conditions for international growth, there’s cause for optimism.
Historically, international expansion has been fraught with the challenges of FX fluctuations, but today’s tools and strategies are making it easier than ever. With the right FX solutions and currency hedging, businesses can manage exchange rate risks, protect their margins, and capitalise on global growth opportunities”.
Shabnam Sheikh-Waseem, Senior Lecturer at The University of Law Business School
Considering recent proposed sanctions of 10% tariffs exports from the UK to the USA, there is a strong immediate impact of weakening trading links with the USA and consequent impact on supply chains. The
The UK is in a far better position than Europe, where the tariffs imposed are 20%, this could be of advantage to the UK, e.g. some European organisations may relocate to UK to take advantage of the lower tariffs and therefore bring with them income streams and jobs.
There is also a possibility that with sanctions being higher in the East the UK may have more competitive trading opportunities in the future with the USA, previously where the USA was provided goods by China, the UK may be able to offer them now at more competitive rates, therefore boosting maybe even bringing back manufacturing industries.
In the short term, there will be a slower-than-expected economic growth rate and a possibility of job losses, there are opportunities to look at providing other products to the USA previously provided by Europe or East.
Guido Cozzi, Chair of Macroeconomics at the University of St. Gallen
“President Trump’s ‘Liberation Day’ tariffs are not just economic measures — they’re a declaration of trade war on a global scale. A blanket 10% tariff on all imports, and even higher rates on 60 targeted countries, including a reported 20% on the EU, risk igniting a chain reaction of retaliation, instability, and long-term damage to global cooperation. This may be a calculated negotiation tactic — start hard, then walk it back. But what works in corporate deal-making often fails in geopolitics. International relations depend on trust, credibility, and a shared commitment to rules — not shock therapy.
The U.S. is undermining the very leadership it built painstakingly after WWII. Back then, it accounted for nearly half of global GDP. Today, it’s less than a fifth. Power has shifted — and this kind of economic aggression may accelerate that shift. Expect Europe to become more autonomous, potentially re-aligning with the UK, and diversifying away from U.S. dependency. Let’s be clear: reciprocal tariffs don’t create jobs — they raise prices, destabilize financial markets, and weaken the alliances that underwrite global prosperity. This isn’t strength — it’s strategic self-harm.”
Scott Sherwood, Founder at TestLodge
“While the impact of these tariffs may be unpredictable, and few markets enjoy uncertainty, there may be a small benefit for companies based in the UK but which trade in USD.
As with us, many of our customers are in the US and Canada, and so despite being based in Wales, we operate mostly in USD. If these tariffs mean that interest rates remain high, this could mean a stronger exchange rate, which could again be bolstered if there is a US-UK trade deal and we do not follow the same possible trend.
This may mean that all our subscriptions become more financially valuable, which would, for us as a company, be a positive if unintended outcome. Much like the rest of the world, all we can do is plan, watch, wait and react.”
