UK trade organizations have called on the government to take urgent action in response to new tariffs imposed by the US, warning that these measures could accelerate the decline of domestic manufacturing.
US President Donald Trump has introduced a 10% tariff on UK exports and a 25% tariff on all foreign-made cars, in addition to last month’s 25% tariff on US imports of steel, aluminum, and derivative products. According to Trump, these tariffs are necessary to correct structural imbalances in global trade that threaten the US economy and national security.
The UK Chemicals Industry Association (CIA) has expressed concern that the increased costs will further weaken domestic manufacturers, who are already struggling with significantly higher energy costs than their international competitors.
“On top of paying energy bills that are 400% higher than those in the US and up to 100% more than in Europe, these additional costs will force companies to reconsider their future in the UK,” said CIA CEO Steve Elliott.
In 2023, UK chemical and pharmaceutical exports to the US were valued at £5 billion (US$6.5 billion) and £6 billion, respectively. Nearly 25% of all UK chemical exports were destined for the US, including essential raw materials like ethylene, propane, and butane used in plastics, fuels, and pharmaceutical propellants, as well as components for inks, soaps, electronics, and construction products.
The CIA also warned that the tariffs will not only hurt UK manufacturers but will also affect the competitiveness of US firms operating in the UK, as many trade directly with their US parent companies. The additional costs could lead to reduced investment in research and the construction of new production facilities.
The UK government has stated that it remains committed to securing a trade deal with the US. However, in the meantime, it has launched a consultation with businesses to determine which products could be subject to retaliatory tariffs. A 417-page list has been published, covering foodstuffs, oils, fuels, metals, fertilizers, chemicals, wood, paper, ceramics, glass, machinery, and process plant equipment.
Describing the US tariffs as “deeply regrettable,” UK Trade Secretary Jonathan Reynolds emphasized the importance of gathering input from stakeholders before taking action.
“We will seek the views of UK businesses over the next four weeks, until May 1, 2025, on which products could be included in a potential UK tariff response. This consultation will also give businesses the opportunity to express their concerns and help shape the government’s approach,” Reynolds stated.
Reacting to the government’s response, CIA CEO Steve Elliott stressed the need for swift negotiations.
“While the government is right to carefully consider its response before retaliating, and we welcome the consultation process, talks between the UK and US administrations must move forward quickly. Minimizing the impact of these additional costs and securing a broader trade agreement that supports UK manufacturing and jobs must be a top priority,” Elliott said.
Trade group UK Steel suggested that a trade deal with the US might not be feasible and urged the UK government to take immediate steps to protect the domestic industry, which has already suffered from a series of major plant closures.
“The UK government must continue its efforts to secure an agreement with the US, but we recognize that this depends on cooperation from both sides,” said UK Steel Director General Gareth Stace. “However, domestic trade policy is entirely within the government’s control, and decisive action can be taken now to strengthen our trade defenses.”
In 2024, the UK exported 180,000 tonnes of semi-finished and finished steel to the US, worth £70 million, representing 7% of all UK steel exports. This marks a decline from 300,000 tonnes in 2017, following previous tariffs, quotas, and an oversupply in the market.
“We cannot afford further delays as our exports suffer and the market is undercut by rising imports,” Stace warned. “The UK steel industry has been in crisis for some time, and bold, decisive intervention is needed immediately.”
The Society of Motor Manufacturers and Traders (SMMT) has warned that UK car manufacturers will struggle to absorb the increased costs, which will likely result in higher prices for US consumers. This, in turn, could reduce demand and force UK manufacturers to cut production.
Similarly, the Food and Drink Federation has raised concerns about the 10% tariff on UK food and drink exports to the US.
“As the UK’s third-largest market for food and drink, the US is crucial for our sector,” said a spokesperson. “Whether it’s chocolate, haggis, or the classic tea and biscuits, our members primarily export heritage British products that are popular among American consumers. Most of these products are made by the 12,000 small and medium-sized businesses in our industry, which will be disproportionately impacted by these tariffs.”
The federation expressed a willingness to work with the government to develop a trade strategy that minimizes the negative effects on UK businesses while maintaining access to key markets.
“We want to ensure that people around the world can continue to enjoy the high-quality food and drink that the UK is known for,” the spokesperson added.
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