A significant number of UK manufacturers fear the impact of US tariffs on their businesses, according to a new survey by the British Chambers of Commerce (BCC). The study, which surveyed over 1,200 firms, including more than 260 manufacturing exporters, highlights the growing anxiety among businesses over trade disruptions caused by US tariff policies.
The survey, conducted between January 20 and February 7, revealed that 63% of manufacturing exporters believe US tariffs will impact them. Across all sectors, 34% of businesses expressed concerns about the effects of US tariffs, fearing not just the direct costs but also the broader consequences of weakened global demand.
Survey Findings
The survey sheds light on how businesses anticipate the impact of US tariffs:
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10% of all businesses expect a significant impact.
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23% foresee a slight impact.
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56% predict no impact, and 10% are uncertain.
Among manufacturing exporters, who are more vulnerable to trade disruptions:
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28% expect a significant impact.
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34% anticipate a slight impact.
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31% foresee no impact, and 6% remain undecided.
The findings come in the context of the US imposing tariffs on Chinese goods and announcing plans for tariffs on Canada and Mexico. While no new tariffs on UK imports had been imposed at the time of the survey, UK firms remain on high alert for potential changes.
Business Voices Highlight Concerns
Many businesses expressed their concerns about the uncertainty created by the US tariff policies:
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A small manufacturing firm in South-West England noted, “The situation in the US with possible tariffs on imported goods is a concern.”
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A micro professional services firm in Greater Manchester pointed out that “US trade barriers proposed by Trump may slow the global economy.”
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Another firm in the West Midlands added, “Tariffs will make the business environment much less certain.”
Expert Insights on Trade Challenges
William Bain, Head of Trade Policy at the British Chambers of Commerce, stressed the need for a calm and strategic approach during this period of uncertainty.
“We have entered a new global era when it comes to tariffs after a prolonged period of trade liberalisation,” Bain stated. “The US approach is driven by both trade and geopolitical aims, creating anxiety for UK firms in an already stagnant economic environment.”
Bain urged the UK government to remain flexible and avoid retaliatory actions unless absolutely necessary. He also highlighted the importance of monitoring potential trade diversion, where goods originally destined for the US could be redirected to other markets, disrupting global trade flows. “The UK’s Trade Remedies Authority (TRA) will have to keep a very close eye on China’s export patterns on goods like clothing, textiles and footwear”, he added.
The BCC also expressed concerns that a prolonged period of tariff-related disputes could lead to a global trade war, impacting not only goods exports but also services that facilitate international trade.
Resilience in UK-US Trade Relations
Despite the challenges, Bain pointed out that the UK’s trade relationship with the US has some robust elements. The US enjoys a goods trade surplus with the UK, and UK services exports to the US, which are significantly higher than goods exports, are not subject to tariffs. This provides a degree of protection for the UK’s overall trade with the US.
However, Bain warned that retaliatory actions by other countries could escalate global trade tensions, leading to broader economic challenges. “UK businesses need certainty, and it’s crucial for the government to take a pragmatic approach to tariffs, ensuring the UK remains competitive in an increasingly volatile global trade environment,” he concluded.
The survey underscores the pressing need for both government and businesses to adapt to the evolving challenges posed by tariffs, ensuring the UK’s economic resilience amidst global trade uncertainty.
