10% tariff imposition on all UK exports to the US causes dismay among trade bodies
President Trump’s sweeping tariffs have caused confusion, anger, and threats of reprisal among political leaders and global markets worldwide.
On Wednesday 2 April 2025, President Trump announced that the United States (US) would be implementing at least a 10% tariff on all imports effective from 5 April 2025.
A spokesperson for the Scotch Whisky Association said: “The industry is disappointed that Scotch Whisky could be impacted by these tariffs. We welcome the intensive efforts by the UK government to reach a deal with the US administration, and we continue to support this measured and pragmatic approach towards a mutually beneficial resolution.”
The Food and Drink Federation (FDF) noted that the added cost burden will harm UK producers’ competitiveness and raise prices for US consumers. Products likely to be affected include tea, confectionery, bakery goods, and preserves.
An FDF representative stated: “This tariff is damaging to our exporters and risks stalling the momentum we’ve built in international markets. We urge the UK Government to act swiftly to safeguard our sector.”
Several countries will be subject to country specific tariffs that will take effect on 9 April 2025. This includes 20% tariff for the EU and 54% for China (including previous tariffs announced). The 25% on Canada and Mexico that were announced last month will be unchanged.
‘Increase barriers’
The Agriculture and Horticulture Development Board (AHDB) has conducted some initial analysis on the US imposing the 10% tariff on UK exports.
Jess Corsair, AHDB senior economist, said: “These announcements go against the World Trade Organisation (WTO) which aims to facilitate free, predictable and smooth global trade. The new imposed tariffs will increase barriers to trade globally. The WTO also has the “most-favored nation” (MFN) principle which means that countries cannot discriminate between their trading partners, so all members are treated equally when it comes to trade. This principle has been ignored as the US has implemented different tariffs on different countries.
“The UK’s main exports to the US include machinery, cars, pharmaceuticals, fishing and electronics. The announcements also included a 25% tariff on foreign made cars. There are potential global economic implications from these announcements, as we have seen on global stock markets this morning. There could also be impacts on inflation as tariffs make imported goods more expensive, and as well as slowing down global trade volumes and subsequently slowing global economic growth. We explored the impact of tariffs on the global economy in a previous article.”
The main agricultural exporters to the US are Canada, Mexico, the EU, Australia and New Zealand. The US imported £7bn of beef, £1.2bn of pork, £1.14bn sheep meat and £1.4bn of cheese (2022-24 3 year average).
The main exporters of beef to the US include:
- Canada – £1.07 billion (3-year average 2022-24)
- Mexico – £1.41 billion (3-year average 2022-24)
- Australia – £1.48 billion (3-year average 2022-24)
- New Zealand – £784 million (3-year average 2022-24)
The main exporters of pork to the US include:
- Canada – £754 million (3-year average 2022-24)
- EU – £241 million (3-year average 2022-24)
- Mexico – £119 million (3-year average 2022-24)
The main exporters of cheese to the US include:
- EU – £1.02 billion (3-year average 2022-24)
- UK – £68 million (3-year average 2022-24)
- Canada – £57 million (3-year average 2022-24)
Jess Corsair added: “This will be a major disruptor of global trade, but the impacts will be difficult to predict until we know how the various trading partners will react. As this starts to become clear we will be able to examine the impacts on the UK and global markets. It is likely that there will be changes to trade flows and we will examine the impact how trade will be displaced especially with key agricultural exporters such as Canada, Mexico, Australia and New Zealand.”
The UK exports to the US include:
- £2.9 million of fresh and frozen beef (3-year average 2022-24
- £23 million of pork (3-year average 2022-24)
- £68 million of cheese (3-year average 2022-24)
Corsair said: “Currently the UK has access to the US rest of the world quota for beef exports. This quota was filled by 17 January in 2025, and then any beef exports are subject to tariffs of 26.4%. It is unclear whether the new 10% tariffs will be additional to the current 26.4% tariff. Additionally, it is unclear whether the 10% tariff will be additional to those countries who already have Free Trade Agreements in place.
“Further clarification is needed regarding the how these tariffs will be implemented alongside current FTAs, quotas and agreements. AHDB will be monitoring this and doing more in-depth analysis on the implication of the tariffs on global trade and the economy.”
As the newly announced US tariffs take effect, managing director of Aurora Capital, George Holmes said the changes for UK small businesses offer some small comfort in that tariffs on UK goods are lower than those imposed on some other countries, such as the EU, however the impact on SMEs will still be significant, particularly for businesses already facing tight margins.
The whisky industry, for example, is already warning that the new tariffs could cost hundreds of millions annually. Small distilleries that rely on exporting to the US could face significant financial strain, potentially needing to scale back operations or hike prices.
Holmes said: “In light of these challenges, businesses may need to look to external financing to manage the impact. It’s important for lenders and financial institutions to step up with practical support and flexible solutions during this period, especially for those in industries hardest hit. With the right financial backing and support, SMEs can adapt and stay resilient despite these new trade barriers.”
Coordinate action
An analysis by Aston University researchers estimates the economic fallout from six US trade tariff scenarios and their impact on trade flows, prices, production and welfare.
It underlines the precarity of the current moment for the UK and other world economies, and calls on swift, coordinated action from UK policymakers to mitigate risks and seize opportunities in an increasingly disrupted trade landscape.
US President Donald Trump’s tariffs in early 2025 have triggered a wave of reactions and retaliation. US imports from Mexico and Canada are subject to 25% tariffs, imported steel and aluminium tariffs are in place worldwide, tariffs on China have risen to 20%, car import tariffs are due to be imposed and countermeasures are rolling out across Europe, Asia and the Americas.
In their report, Tariffs and Triumph: The UK’s Edge in a Fractured World, Professor Jun Du and Dr Oleksandr Shepotylo, from Aston Business School’s Centre for Business Prosperity, model the potential global economic costs of US tariffs and outline a series of strategic responses for the UK.
Using core economic principles and a structured gravity approach – an economic framework that studies and quantifies the effects of various determinants of international trade – their report analyses 2023 bilateral export data and gross domestic product (GDP) for 132 countries. The report models welfare changes as measured by changes in real (net of inflation) income per capita.
Across the six potential scenarios, their key findings are:
- US initial tariffs: US prices rise 2.7% and real GDP per capita declines 0.9%. Welfare declines in Canada by 3.2% and Mexico by 5%.
- Retaliation by Canada, Mexico and China: US loss deepens to 1.1%, welfare declines in Canada by 5.1% and Mexico by 7.1%.
- US imposes 25% tariffs on EU goods: Sharp transatlantic trade contraction, EU production disruptions, US welfare declines 1.5%.
- EU retaliates with 25% tariff on US goods: Prices rise across US and EU, mutual welfare losses and intensified negative outcomes for the US. UK experiences modest trade diversion benefits.
- US global tariff: Severe global trade contraction and substantial price hikes substantially affect North American welfare and UK trade volumes.
- Full global retaliation with reciprocal tariffs: Extensive global disruption and reduced trade flows, severe US welfare losses, $1.4 trillion global welfare loss projected.
For the UK, reductions in imports from the US expose critical vulnerabilities in UK supply chains, and under the worst-case scenario, UK exports to the US fall by 43.6%. Retaliatory tariff measures would also substantially reduce UK exports to other markets around the world, in particular to Mexico, and UK–EU trade would be reduced. However, in a scenario where the EU retaliates with tariffs US goods, UK exports to the US would potentially surge by 17.5%.
Professor Jun Du said: “The picture for tariff measures may not be clear at the moment, but what is clear is that economies like the UK need to plan for various eventualities and start to put mitigating measures in place. US tariffs offer the UK a potential fortune through trade diversions, yet these gains could complicate efforts to reset UK–EU relations, amplifying economic divergence, political distrust and misalignment. Our report will help policymakers look at the costs and benefits of the scenarios and develop a position to move forward.”
The report underlines that the UK’s post-Brexit status provides flexibility and greater agility in a shifting trade environment. While the tariffs highlight vulnerabilities for the UK, such as dependency on the US and EU markets, they also present openings for action, such as reconfiguring supply chains to include Japan and South Korea, and enhancing domestic production capacity, for example in electronics or automotive components.
Diversifying trade towards less affected regions, such as India and Asian markets, could mitigate impacts. The UK’s capacity to negotiate trade policies independently allows it to seize opportunities that will arise from shifting global trade dynamics.
To signal a commitment to continued European cooperation, the researchers recommend UK policymakers take a pragmatic approach in response to US tariffs that balance short-term gains with long-term stability. They suggest enhancing UK–EU supply chain coordination, taking a complementary rather than competitive stance by incorporating EU input in UK global trade negotiations, and aligning on calls to reform the World Trade Organisation (WTO). They also suggest pairing US bilateral trade talks with symbolic gestures to the EU, such as reviving the youth mobility scheme.
Dr Oleksandr Shepotylo says: “Although we predict significant costs for the UK, there are also opportunities for leaders to employ rapid measures to mitigate against the risk of a full-scale trade war and enhance the UK’s position during this challenging time. We hope that our report will be read and used by those with decision-making powers to develop a strategy to move forward in uncertain times.”
