Donald Trump winning the 2024 presidential election so resoundingly was a shock to almost everyone aside from those who voted for him.
The fallout of this year’s race has been far more subdued than in 2021, but for businesses in the UK, and indeed the UK’s entire economy, there was a shock within the noise of the rhetoric that could have profound consequences if implemented.
As part of his winning pitch to the US electorate, Trump promised to impose a blanket 20% tariff on all imports into the US – a move which could cost the UK a substantial £22bn in lost exports. That was the immediate response. Analysis and comment pieces in the weeks since have been more mixed, with potential opportunities for UK firms and the UK economy itself.
Immediate reactions to the Trump tariff proposal
The announcement of a proposed 20% tariff on all imports into the United States prompted widespread alarm from policymakers and trade experts across the UK. The Centre for Inclusive Trade Policy (CITP) at the University of Sussex estimated the tariff could lead to a £22bn reduction in UK exports to the US. This amounts to a 2.6% contraction of overall export activity and underscores the potential disruption that could ripple through key industries heavily reliant on US trade. Sectors such as fishing, petroleum products, and mining are particularly vulnerable, with projected export reductions of 21.5%, 20.9%, and 20.4%, respectively. Potentially industry-closing levels.
For the UK’s broader economy, prospects mightn’t wouldn’t be much brighter. According to the National Institute of Economic and Social Research (NIESR), economic growth could fall to just 0.4% in 2025 if these tariffs take effect, compared to the 1.2% growth projected in a tariff-free scenario. Such an economic slowdown would compound challenges already posed by post-Brexit trade barriers, the ongoing energy crisis, and inflationary pressures. Businesses relying on transatlantic exports, including aerospace and automotive manufacturers, would face significant headwinds.
The immediate reaction among business leaders has been one of urgency and concern. Many firms have called for greater government support to help mitigate the fallout. This includes calls for financial assistance, supply chain realignments, and diversification of export markets. While government intervention can provide a temporary reprieve, many analysts caution that such measures alone may not be enough to counteract the systemic challenges posed by tariffs of this magnitude.
The response in Westminster has been similarly vocal. Trade experts and MPs alike have underscored the need for a diplomatic approach to prevent these tariffs from materialising. Discussions around reviving elements of the US-UK free trade agreement talks have gained traction, although analysts warn that the political appetite for bilateral trade deals under Trump may be limited. The UK government faces a delicate balancing act: maintaining its relationship with the US, while seeking alternative trade avenues if needed.
It would take a monumental diplomatic effort to get the UK some sort of tariff pass, especially given the comments made about Trump from Labour frontbenchers.
Opportunities amidst the challenge
While initial analyses painted a bleak picture, subsequent commentaries have offered a more balanced perspective, suggesting that the UK economy could, in certain respects, outperform its rivals. The Centre for Economics and Business Research (CEBR) highlighted that the proposed tariffs, while potentially reducing GDP by 0.9%, could also present strategic opportunities for the UK to pivot and innovate. For instance, the UK’s regulatory flexibility post-Brexit positions it uniquely to adapt to shifting global economic landscapes.
One potential area for growth lies in green technology and clean energy. Analysts have noted that if the US under Trump de-emphasises investment in these sectors, the UK could seize the opportunity to become a leader in these burgeoning industries. With government backing and international partnerships, British firms could establish themselves at the forefront of clean energy technology, attracting global investment and fostering economic resilience. This approach would also align with the UK’s broader commitment to achieving net-zero carbon emissions by 2050.
Another area of focus is strengthening economic and trade ties with the European Union. Research from the CITP revealed that nearly 50% of trade experts believe that improving relations with the EU should be a top priority – including here at Go Exporting. A closer partnership with the EU could offset some of the economic damage caused by US tariffs. Improved EU relations would facilitate smoother trade routes, reduce bureaucratic barriers, and offer access to one of the world’s largest markets. For sectors such as manufacturing, pharmaceuticals, and financial services, an EU-oriented strategy could prove crucial.
Furthermore, there are opportunities to recalibrate the UK’s trade strategy to target emerging markets in Asia and Africa. These regions are experiencing rapid economic growth and offer lucrative prospects for UK exporters. Diversifying trade partnerships could mitigate dependence on the US market and bolster long-term economic stability. Programs such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could play a pivotal role in achieving this diversification.
Ultimately, while the Trump tariffs present a formidable challenge, they also serve as a wake-up call for UK policymakers and businesses to embrace innovation, diversification, and resilience. The emphasis should now shift to leveraging the UK’s unique position as a post-Brexit, globally connected economy capable of adapting to shifting geopolitical currents. Strategic investments in emerging industries and robust partnerships with new and existing allies may enable the UK to weather the storm and emerge stronger.
Whether or not Trump’s tariffs come into effect or not waits to be seen. If they do, there could be Brexit-level upheaval for many firms and entire sectors within the UK economy.
Let’s wait, watch, and see.
This summer, Go Exporting CEO Mike Wilson joined Alibaba’s Eric Cross for a webinar examining the opportunities for US firms to trade in the EU.
The talk covered a broad range of topics including industry-specific opportunities, market statistics, administrative structure, key markets and culture and approach.
Watch the webinar in full below.
Find out more about exporting into the UK in this free guide where we cover everything from approvals and VAT to market research, customs and compliance, and effective marketing.
CEO of Go Exporting, Mike Wilson, has contributed 10 top tips to a global publication of 1001 business tips from 101 exporters and global trade advisors.
The publication, arranged by The Belmont Business Enterprise Centre Inc in Australia, will form part of an e-book to support sole traders and SMEs in expanding their exporting skills and knowledge, and how best to prepare for a national export development grant program.
The 10 contributions from Mike Wilson were:
- Define your objectives
- Prepare your export readiness action plan
- Discovering where to export
- Finding focus
- Choosing routes to market
- Assessing pricing and market entry viability
- Creating a bespoke international marketing plan
- Defining how to implement that plan
- Compiling a detailed export plan
- Reviewing and refining your approach
Interested in expanding your business into new Scandinavian markets? Then you’re in luck!
Earlier this month, Go Exporting CEO Mike Wilson joined Business Wales for a webinar advising delegates as to the export opportunities in Denmark and Sweden.
The webinar included details on market statistics, administrative structure, key sectors and opportunities, business culture and post-Brexit dynamics.
Watch the webinar in full below.
Looking to expand internationally but aren’t sure where to start, or lack the internal resources to drive international growth? Go Exporting specialises in helping firms like yours to open a world of opportunities.
Learn more about our international trade consultancy services here.
The next government needs to deliver a better trading relationship with the EU as a matter of priority.
That’s the view of the British Chambers of Commerce, one of the most influential business networks, set out as part of its Future of the Economy Manifesto for 2024.
The manifesto focuses on five key areas of the UK economy, from green innovation and digital, to people, work, and global Britain.
The manifesto notes that: “There is a clear need to improve trading relationships with the EU, which remains our biggest trading partner.
“Retaining Britain’s place on the global stage also means keeping our most successful businesses who may be looking overseas for finance. British growth capital should be made more accessible.
“Finally, the government should only diverge from EU rules where it adds value to UK plc. We encourage close alignment on regulations that impact Britain’s global trade, such as standards on manufactured goods, while supporting divergence where there is a clear benefit, such as the Mansion House reforms that will help unlock additional investment for UK firms.”
The manifesto put forward three key recommendations for growing global trade;
- Implement trade deals which improve export potential for business
- Grow foreign direct investment into the UK
- Continue reforms to increase UK investment
A Swiss solution?
William Bain, BCC Head of Trade Policy, said that the UK should be looking towards a Swiss-style deal with the EU after a recent trip to the country.
He said that: “Switzerland is one of the UK’s strongest trading partners with a depth to its finance and services trade that mirrors our own. It is also at the heart of Europe’s life sciences and pharmaceutical industries.
“As a member of the European Free Trade Area, while sitting outside the European Economic Area, it can set its own course on many regulatory issues.
“But it retains close links with the EU Single Market, particularly in goods. These have been developed through bilateral agreements with Brussels over the past half a century, though Switzerland is also a full participant in the Schengen Zone, allowing friction-free movement through Swiss territory for qualifying citizens.”
Grow through the growing pains with Go Exporting
If Brexit has hampered international trade growth, or put the brakes on your export plans altogether, then we can help.
Go Exporting are the industry experts in helping firms to open a world of opportunities abroad, from identifying potentially profitable markets, to putting in place the export strategy and distributors to get you there.
Interested? Learn more about our international trade consultancy here.
UK exporters are being urged to transition to the Customs Declaration Service (CDS) before the 4th of June deadline to ensure the continued smooth processing of their export declarations. With less than a month remaining, HMRC has intensified calls for businesses to make the switch from the current Customs Handling of Import and Export Freight (CHIEF) system to the new CDS.
Why the change?
The transition to the CDS is part of the government’s ongoing efforts to modernise and streamline customs processes. The new system promises enhanced capabilities, including improved data integration and greater flexibility in managing customs procedures. The CHIEF system, which has been in operation for decades, will be completely phased out, marking a significant shift in how export declarations are handled.
Sarah Hartley, HMRC’s Director of Border Change Delivery, said: ”There are just weeks left for businesses to migrate their export declarations to CDS – those who have yet to move need to do so now.
“Anyone who needs help migrating to CDS should work with a customs agent who is ready to use the system and can make declarations on their behalf.”
Support and resources available
To assist businesses in this transition, HMRC has provided a variety of resources, including a CDS toolkit and checklists. Exporters are encouraged to utilise these tools to ensure they are fully prepared for the switch.
Businesses that fail to adopt the CDS by the deadline may face significant disruptions to their export operations.
Steps to transition
Exporters should start by familiarising themselves with the CDS and its requirements. Key steps include:
- Registering for the CDS: Businesses need to sign up for the service through the Government Gateway.
- Understanding the new data requirements: The CDS requires more detailed information than CHIEF, so exporters should review the new data fields and ensure they have the necessary information ready.
- Updating software: If businesses use customs declaration software, they must ensure it is compatible with the CDS. HMRC provides a list of approved software providers.
- Training staff: Employees who handle customs declarations will need to be trained on the new system to ensure a smooth transition.
Exporters keen to understand the main differences between the two systems can do so with this gov article.
Do you want to learn the secrets of selling internationally from export experts with over 30 years of experience helping businesses expand globally?
Then this webinar is for you.
On Wednesday 31st January at 12pm, SIITACE (The Society of Independent International Trade Advisors & Customs Experts) is presenting an exciting online event where they’ll share valuable insights on selling internationally.
Discover the secrets to expanding your customer base beyond borders and tapping into new markets.
The expert speaker will guide you through the process, covering topics such as:
– Are you ready to sell internationally?
– How to choose the right markets
– The importance of focus
– Who is the customer?
– Decision-making drivers
– Sales Approach
– Developing your Value Proposition
– Route to Market Options
Don’t miss this opportunity to learn from industry leaders and gain the knowledge you need to succeed in the global marketplace. Sign up now!
https://www.eventbrite.co.uk/e/how-to-sell-internationally-tickets-795385588707
“The facts are clear. Businesses which trade internationally are more resilient, more sustainable, employ more people and are more profitable.”
Those are the words of Marco Forgione, director general of the Institute of Export and International Trade. And a new report suggests we can add another adjective to that list – more productive.
A feasibility study published by the London School of Economics on behalf of the government has found that businesses which export are increasingly productive compared to non-exporting firms. And there are a number of reasons for this.
The report suggests that UK businesses can learn a lot from international partners, clients and customers – especially when exporting to advanced economies.
Exporting firms that are also prolific importers are also more able to weather economic storms that can affect supply chains by having a more diversified route to materials. Importing businesses also have increased scope to source different materials and technologies.
In fact, the productivity improvements from training internationally range from three to 22%.
You can read the stody in full on the government website here.
Capitalise on the opportunities of exporting
Is your business making the most of global opportunities?
Exporting for the first time or growing an existing operation into new markets can seem a daunting task, and a lack of internal knowledge and resources is a key reason why many firms avoid expanding further afield.
At Go Exporting, we help businesses to accurately identify profitable target markets and create a roadmap to achieving success in that territory, with as much or as little support as needed to make those exporting goals become a reality.
Learn more about our international trade consultancy services here.
Research commissioned by the British Beauty Council has found that Brexit has severely impacted the UK beauty sector, with SMEs especially affected.
The research, conducted by Oxford Economics, found that customs delays, increased costs associated with cross-border trade and a reduction in skilled EU workers entering the UK economy have shrunk the value of the UK beauty industry’s exports into the continent by £850m.
The research looked at sales trends before and after the UK’s departure from the European Union and found that, whilst sales increased in 2010 and 2016, exports have been in decline ever since the Brexit vote.
Interestingly, export values from UK beauty firms into the global marketplace have remained steady – its EU sales which have declined.
Head of trade policy at the BCC, William Bain, noted that: “The reality is if UK business is to thrive, then we must export more, it’s as simple as that. If we want to remain one of the world’s largest economies, then we need more firms selling goods and services internationally.
“The pandemic, supply chain disruption, Brexit, non-tariff trade barriers and global headwinds have all made this more difficult over the past few years.”
Read more: Growing crisis for UK’s exporting industry
This report, although damaging for the impact Brexit has had on trade with the EU, highlights the advantages of setting corporate sights further afield.
By targeting a global audience rather than just within the Eurozone, UK firms have an opportunity to find new customers – potentially in territories where competition is lower, or there is huge demand for their products and services.
To find out how export-ready your business is, take a quick and free quiz right here and get an instant assessment report on areas you need to work on to start taking advantage of the global opportunities that are out there.
Is your business ready to expand globally and capitalise on a world of opportunities that awaits?
You can assess your readiness for export with our free Export Readiness Quiz! Answer just 16 questions and we’ll provide you with an Export Readiness Score and breakdown of the areas where you need to pay attention to be in a position to successfully start or expand your journey into international markets.
We look at four key areas:
Company – How prepared is your business, it’s people, systems and procedures for export?
Market Knowledge – How well do you know your potential market and where the best opportunities lie?
Export Strategy – Is your strategy sufficiently defined and detailed to ensure export success?
Barriers to Entry – How aware are you of the barriers to entry such as customs rules and regulations, competition, product development requirements?
The final report will identify recommended improvements and further actions you should take to be a successful exporter. From this you can develop your Export Readiness Action Plan.
There is a world full of opportunities out there. Carefully planning and preparing will help you to profitably expand into international markets.
Don’t delay. Start today! Take the quiz here.
