BRITISH exports to the US worth over £182 billion annually are now subject to new tariffs under policies announced by Donald Trump.
Most goods will face a 10 per cent tariff, with certain items subject to higher rates and some exemptions.
While the tariff is paid by US importers, the added costs are expected to be passed on to consumers, potentially reducing demand for UK products.
The automotive sector is among the hardest hit. British-made vehicles, which generated £9 bn in exports to the US last year, are now subject to a 25 per cent tariff.
Brands like Jaguar Land Rover, Rolls-Royce, Aston Martin, and Mini are expected to face challenges.
According to the Institute for Public Policy Research, up to 25,000 jobs may be at risk, particularly at Jaguar Land Rover and the Mini plant in Cowley.
Mike Hawes of the Society of Motor Manufacturers and Traders told The Times, “These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.”
In food and drink, the UK exports £1.6 bn to the US annually, including Scotch whisky, tea and biscuits.
With margins in the sector already low, producers may not be able to absorb tariff costs.
Scotch whisky, which accounted for £971 million in exports last year, could face similar outcomes to 2019, when a previous 25 per cent tariff reduced shipments by the same percentage.
The new 10 per cent tariff on UK food and drink is lower than those imposed on the EU, which could keep some British products competitive.
In defence, UK firms export £2.5 bn worth of components used in US military equipment, including the F-35 jet and Tomahawk missiles.
While a 10 per cent tariff applies, Kevin Craven of ADS told The Times it was “disappointing” but would not “kill our sectors”.
However, the 25 per cent tariffs on steel and aluminium could increase input costs, affecting major defence projects in the UK.
Steel exports to the US were valued at £370m last year, but the sector faces broader risks from diverted exports from other countries.
British Steel cited US tariffs as a factor in its recent decision to close blast furnaces, affecting up to 2,700 jobs. UK Steel has urged government intervention.
The pharmaceutical industry, which exported £6.5 billion worth of products to the US last year, has been exempted from the tariffs, according to a White House fact sheet. However, supply chain disruptions could still raise costs. GSK and AstraZeneca are among the firms affected.
Energy prices in the UK may rise over time due to increased US domestic consumption of gas, reducing LNG exports.
Anise Ganbold of Aurora Energy Research told The Times, “The UK will see higher gas prices, with a knock-on effect on retail gas and electricity bills.”
Experts also warned that the tariffs could affect corporate profitability and reduce investment in research and development across sectors including pharmaceuticals, semiconductors and green technology.
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