As of April, the UK’s economy reached an important peak. The latest figures show a 0.3% contraction in Gross Domestic Product (GDP). Monthly jump in exports This decline comes on the heels of a slight increase of 0. Rachel Reeves, Britain’s shadow finance minister, described the month as “a very, very challenging time.” She blamed much of the slump on the continued trade war that former president Donald Trump initiated.
The Office for National Statistics announced a record plummet in UK goods exports to the United States. In April, exports crashed by £2 billion ($2.7 billion), the biggest drop since records started in 1997. The cause of the decline is probably the tariffs that were put on Britain’s exports to the US. This was the first announcement of tariffs by Trump, made on April 2. This has been done through the rollout of new tariff measures, including a base 10% levy on all goods exports plus an add-on country-specific tariff.
Businesses and consumers across the UK have faced growing economic anxiety because of the haphazard roll-out of these tariffs. This climate has exacerbated the overall trade landscape leading to declining exports and industrial production.
Yael Selfin, chief economist at KPMG UK, suggested that the current picture is a significant, medium-term headwind to UK trade. She stated, “This is expected to act as a headwind for UK trade in the medium term.” This projection further brings to the fore worries about the prospective long-term consequences that tariffs could impose on the UK’s economic environment.
Reeves offered a broader picture as well, highlighting how the uncertainties with tariffs have slowed or halted production as well as exports. “There was a huge uncertainty about tariffs… If you dig into those GDP numbers today, (we see) exports weakening and production weakening because of that uncertainty in the world around tariffs,” she noted.
Despite these challenges, some analysts maintain that the recently negotiated accord between the US and the UK provides a degree of policy certainty for British businesses. With tariffs due to be introduced no later than early July, the next few months look precarious for UK trade.