The British Chambers of Commerce is urging the government to adopt its six-point plan to support UK exporters as the US President’s new 15 per cent tariff kicks in.
Thousands of British businesses are expected to be worse off as they see the tariff paid on their exports increase by a further 5 per cent from 05:00(GMT) on Tuesday 24 February.
The BCC calculates that this will increase the levies raised from UK exports to the US by between £2bn to £3bn. This will have to be absorbed either by our exporters, US importers or their customers.
The call for action comes as new research by the BCC’s Insights Unit found that:
- One quarter of exporters said a general export cost increase of 10-15% would put more than half of their overseas sales at risk
- 80 per cent of exporters currently feel exposed to geopolitical risks
- One in eight exporters were already exploring strategic shifts to reduce exposure to US tariff uncertainty
The BCC has written to government to set out six steps it can immediately take to help ease the cost burden on firms. It believes that the nature of the legislation being used by the US President means an exemption for the UK from the new tariff rate is unlikely. But there are a range of other tactical options available.
William Bain, Head of Trade Policy at the BCC, said:
“British businesses exporting to the US have been on a non-stop rollercoaster ride for almost a year and their patience is wearing thin.
“The constant shifting sands on tariffs have worn them down and it is no surprise that so many are now considering a change in emphasis to other markets.
“That’s a sensible move, but the US remains our single biggest trading partner and to disengage it with entirely would be a mistake. Last year it accounted for £60bn worth of UK sales.
“It is very difficult to predict what the next twists and turns in this saga will be, but we believe there are several steps the government could take to stabilise the situation.
“It is absolutely vital that the UK continues to negotiate with the US, both on the new 15% tariff and other levies already in place, such as on steel and aluminium. It should also seek immediate discussions with Congress, which now has an important role going forward.
“Getting on the front foot is crucial, not only to ease the immediate pain but to show businesses that the government is pulling out all the stops to limit the damage being caused.”
The BCC’s full six-point plan, includes:
- Carry out co-ordinated diplomacy with key international partners to encourage the US Administration to lower the 15% tariffs as soon as possible. Meet with the US Administration and Congressional decision-makers and involve impacted UK businesses.
- Implement the Economic Prosperity Deal and Technology Prosperity Deal in full.
- Raise the capacity of UK Export Finance from £80bn to £100bn, to support exporters as they deal with increased cost pressures.
- Increase facilities and loans from the British Business Bank to support firms facing unexpected increases in costs and strain on cashflow.
- Review the UK Global Tariff (UKGT) to see what further support can be provided to UK manufacturers on import and component costs.
- Boost export support to allow firms to explore other international markets; including the FCDO-BCC Diplomatic Advisory Hub and BCC Trade Accelerator programme.