Limited UK Tariffs Deal With USA Could Be Too little, Too Late
The long-promised US - UK tariffs deal could not have come soon enough, says the international delivery expert Parcelhero. However, it warns the limited agreement could prove to be too little, too late for many of the UK's smaller exporters. New figures show 8.7% of UK manufacturers, 7.7% of retailers and 6.8% of transportation & storage firms exporting to the US experienced a notable drop in demand last month in the face of new tariffs.
Some have already quit the US market. The details of a new VE Day tariff deal between the UK and the US have been revealed, but the international delivery expert Parcelhero believes the new measures could prove too little, too late to help many SME exporters hit by President Trump's new tariffs. The new deal includes the scrapping of tariffs on UK-produced steel and aluminium entering the US and cutting the USA's 27.5% tariff on UK car exports down to the basic 10% (up to a quota of 100,000 cars).
This will be in exchange for new UK market access for US products such as ethanol and certain types of beef. However, Parcelhero is concerned that the majority of Britain's SME exporters to the US don't gain anything by the changes in US tariffs on vehicles and steel. The blanket 10% tariff on products valued at over £800 still remains on most products not produced by the UK's largest multinationals.
Parcelhero's Head of Consumer Research, David Jinks M.I.L.T., explains: 'Prime Minister Kier Starmer is to be congratulated in achieving a full trade agreement with India and this partial trade deal with the US in the same week. These are agreements that will help some UK exporters and importers to boost sales. 'However, for many of the UK's smaller exporters to the US, the devil is in the detail.
This new US trade deal simply doesn't help most of them. Last year, UK goods exports to the US were worth GBP59.3bn - a significant fall of GBP2.3bn (3.7%) compared to 2023, according to the latest Government figures. And that was before new tariffs were even a gleam in Trump's eyes.
Coming right up to date, new Office for National Statistics (ONS) figures released just today show that 8.7% of UK manufacturers, 7.7% of retailers and 6.8% of transportation & storage sector firms surveyed between 22 April and 4 May reported reduced demand last month because of the impact of US tariffs. 'That is the tip of the iceberg.
8.1% of UK manufacturers and 4.6% of retailers complained about the impact of additional costs because of new US tariffs. In addition, 1.6% of manufacturers and 4% of retailers said they had already had to pass on the costs directly to their customers.
As a result, 1.8% of manufacturers and 1.3% of retailers have already stopped or paused their exports to the US. Projecting to the month ahead, a further 2.9% of manufacturers and 1.4% of retailers intend to stop or pause their US exports. Of those that remain, 9.4% of UK manufacturers, 7.5% of retailers and 5% of transportation & storage companies are bracing for reduced demand.
'All this means that, while the tariff deal is good news for the UK's automotive, aerospace and steel giants, it's hardly the "full and comprehensive" deal that President Trump is touting it to be.
The fact remains that many UK exports, particularly those produced, sold and delivered by smaller companies rather than major industries, are still being crippled by the new 10% basic US tariff.
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