£20bn hit to the UK economy from Donald Trump’s planned tariffs, says research
The US is the UK’s second-biggest trading partner after the EU and Britain sent £188.2 billion of exports to the US in the 12 months to the end of June
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Donald Trump’s plan to impose tariffs on US imports will hit the UK economy to the tune of £20bn, according to research.
Mr Trump has said he plans on introducing a 20 per cent levy on most imports to the US in order to help out domestic businesses, with 60 per cent on imports from China.
That will trim the UK’s economic output by 0.9 per cent by the end of his presidency, according to the Centre for Economics and Business Research. This is the equivalent of £20bn, using 2023’s figures for economic output.
The US is the UK’s second-biggest trading partner after the EU. Britain also sent £188.2bn of exports to the US in the 12 months to the end of June, about a third of which were goods and the rest services.
The US is a big market for UK cars, aviation parts such as jet engines, and medicine, all of which could be hit.
However, Mr Trump’s anti-climate posture could offer an opportunity, said CEBR economist Sara Pineros, as Britain could corner the “clean” technology market.
Mr Trump could also roll back Joe Biden’s generous subsidies for green technology, making the country a less attractive place for electric vehicle makers, hydrogen developers and other industries aiming to make and harness low-carbon energy.
This could be a good opportunity for chancellor Rachel Reeves to offer a more upbeat story for Britain’s economy and attract them to the UK, Ms Pineros said.
There is a way out of paying the tariffs, albeit one which the government may find undesirable. Ms Pineros explained: “Seemingly, the clearest path for the UK to avoid Trump’s tariffs would be to agree to a free trade agreement. Indeed, Trump pursued a deal much more proactively during his first term as president than Biden.
“Such a deal would be doubly powerful, not only by reducing existing trade barriers but also by avoiding the new wide-ranging tariff, making the UK a cheaper source of goods than those economies that are hit with the tariff. Unfortunately, the major sticking point to a deal remains food standards, and tariffs may be used to pressure the UK to accept US demands in this regard.”
The US has long demanded that the UK relax its food regulations, which the government has refused to do.
The most headline-grabbing of these rows has been over chlorinated chicken. In the US, slaughtered chickens are rinsed in chlorine to disinfect them, something which is deemed unnecessary here in Britain.
According to the UK Soil Association charity, “this is done to treat high levels of bacteria, a symptom of poor hygiene and low animal welfare conditions not allowed in UK farming”.
The US also allows the use of steroids in beef farming, a practice banned in the EU since 1989, as well as genetically modified crops such as corn and soy.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments