A snap poll conducted by the Chamber of Commerce network to understand the impact of the tariffs announced last week by the US President reveals the extent on fallout on businesses in the UK.
Main findings
- 62% of UK firms across the UK and with trade exposure to the USA say they will be negatively impacted by US tariffs. This increases to 75% for businesses based in the North of England.
- A third of firms with trade exposure to the USA say they will increase prices in response to the tariff. Another quarter say they cannot pass on additional costs to their customers and will have to absorb the costs, leading to lower profit margins.
- 44% of firms with exposure to the USA say the UK should seek to negotiate a closer trade relationship with the USA, and 43% want closer trade with other markets. Only a minority want the UK to impose retaliatory tariffs.
- Alongside increasing prices, 15% said they would seek alternative suppliers, while 13% said they expected to absorb the costs. Around a third (36%) said they would take no action at this time.
What Businesses Said
- "While the full effect remains to be seen, we are closely monitoring the situation. At this stage, our focus is on assessing the price increases that will be implemented by our US suppliers and the timing of those changes. We understand that the retaliatory tariffs from the UK government and the EU will also play a role in shaping our future decisions, as we import a significant amount of goods into the EU. This could result in our goods facing tariffs twice, which will further complicate our ability to maintain pricing and profitability." SME manufacturer
- "The tariffs is another nail in the coffin of an already declining British industry. Manufacturing is shot." SME manufacturer.
- "We source part of our products from China, as well as the UK - most of our goods will be UK origin but a small amount maintain Chinese origin - this will be a massive negative impact for our company. We cannot currently find a definitive source of what exact duties will now be applied to our goods, without this we will struggle to give increased prices to our prospective customers, which means trades are less likely to happen." - micro manufacturer
- "We export components to SE Asia, our customers export to the USA. We will be hit with a loss of export business and reduced margins." - micro manufacturer
- "These tariffs now mean trade is more difficult with America, which was one of the largest markets we were pushed to take advantage of post-Brexit. If trade is now going to be ultimately more difficult with the EU and America, I fail to see how British businesses are at any sort of advantage. Of course, if some sort of trade deal with America did emerge, I would change my views immediately. I struggle to be particularly optimistic about the idea that we might secure a trade deal that doesn't involve the UK sacrificing certain standards or relationships with other countries." - medium manufacturer
- "The tariffs will mean that we will focus on EU countries to do business with – however, Brexit continues to make this more challenging than before." - micro marketing firm.
Responding to the findings, Subrahmaniam Krishnan-Harihara, Deputy Director of Research at Greater Manchester Chamber of Commerce, said: "The findings from this snap poll shows that many businesses are concerned about the immediate effects of tariffs imposed by the US. There are, however, very few businesses who want an escalation. There is strong support for the government's strategy to continue negotiations rather than retaliate. A deal may indeed be possible, but the government should extend support and guidance for businesses, who are affected by the tariffs.
"For many businesses, the US is an important trading partner, and the results show that they do not want to jeopardise their existing trading relationships. At the same time, businesses are keen to explore other trade markets. However, the long-drawn impact of Brexit means there are now some barriers to trading with the EU, an area that should receive attention from government.
"With potential retaliatory actions by other countries, the likelihood of a global trade war is increasing, along with the expansion of economic repercussions. This is at a time businesses face other significant cost pressures by way of additional NI contributions. An economic downturn is possible but with concerted effort, a recession can certainly be avoided. This is not the time to impose any additional tax or other costs on business. The focus should instead be on measures that give businesses certainty and enable them to invest."
Susana Córdoba, Head of International Trade at Greater Manchester Chamber of Commerce, added “In 2023, according to ONS figures, over 2000 businesses across Greater Manchester exported an estimated £753 million worth of goods to the US, making it our largest single export market for goods. With the bulk of our exports being within manufacturing, machinery and transport equipment, we suspect these tariffs will impact the region’s economy.”
“Retaliation at this moment could just lead to further instability in an already fragile global landscape and is clear most businesses want the government to continue negotiations which hopefully can get the 10% tariff reduced. So, if you are a business impacted by the tariffs, please note the UK Government has launched a call for input on potential UK Tariffs in response to US Tariffs, so we urge firms to complete this survey, so government is clear on what are the businesses priorities on this."
Have Your Say on Impact of US Tariffs
At Greater Manchester Chamber, we are keen to understand how the tariffs impact your business. Our survey will take no more than five minutes to fill in, and your responses will inform our discussions with local and central government about what we can do to help. Take the survey here.
Find Out More
Join us on 24th April for our Chambers Trade Academy Webinar as we invite policy experts and advisers to provide insights on the US tariffs and tips on how companies can mitigate risks and manage uncertainty.