Since he announced plans for new tariffs on exports to the US at the beginning of April, President Trump has not been out of the news, with daily updates about what he is expected to do next. But what do his decisions actually mean for UK businesses and consumers?
Panic in the markets
With Trump’s announcement that British goods will be subject to a 10% tariff and all foreign cars will be slapped with a 25% tariff, there has been concern that the UK’s manufacturing sector will be damaged. With companies already still suffering the effects of Brexit, the markets are understandably nervous about what will happen and businesses are already feeling the effects. Some Confederation of British Industry members are already reporting increased costs and supply chain disruption.
The new tariffs are expected to hit the UK economy by 0.7%, which is seven times more than the country’s growth last quarter. And because they are imposed on goods and not services, it is the UK’s manufacturing sector which will be most impacted.
This will affect thousands of businesses, including car manufacturers, electronics, transportation equipment and machinery such as pneumatic conveying, which is provided by companies such as www.aptech.uk.com/pneumatic-conveying-systems. These companies use equipment and machinery to streamline manufacturing processes to keep costs down, and they are likely to be among many bearing the brunt of Trump’s tariffs.
Uncertainty
The main issue is ongoing uncertainty, especially for companies with a high percentage of their turnover in the US. Many are continuing to trade with the US now and plan to in the future, in the hope that Trump may eventually back down. But others are already making changes such as moving manufacturing to the US at increased cost and weighing up whether or not to continue to export to the US.
While Keir Starmer tries to strengthen the UK’s existing ties with the US, Trump’s erratic and temperamental behaviour means many businesses remain concerned for their future and unable to plan, leading to a knock-on effect on the economy as a whole.
