New US President Donald Trump has just released the first list of retaliatory tariffs targeting countries around the globe. These proposals would drastically affect the UK’s automobile, aerospace and manufacturing sectors.… The new tariffs would certainly eat away at the suppliers available, hitting smaller companies such as Barkley Plastics especially hard. The UK automotive sector is already under severe strain. Now, tariffs create a new obstacle, injecting fear about job security and market stability.
The new tariffs begin with a 10% tariff on hundreds of products imported from China into the U.S. This is going to hit sectors most that rely on exports to this key, crucial market. The US provides a huge and dynamic market for UK-based companies. This significance is further underscored by its amazing £971 million annual value created for Scotch whisky producers. Experts caution that the new tariffs could be crippling to sales and access to markets.
Denise Cole, a representative from Barkley Plastics, articulated the concerns of smaller suppliers: “The specialist products we sell, they don’t manufacture in the US anyway. They would struggle to get them elsewhere.” She emphasized that the tariffs add substantial costs to operations, noting, “That’s added £35,000 to my costs – that’s a whole person’s wages.” Despite her concerns about the economic implications, she remains cautiously optimistic: “I really don’t think it’s going to impact us in a negative way.”
Anthony Wills, the head of Islay’s Kilchoman distillery told Reuters that he was appalled at the tariffs. After all, he said, they could very much poof their business prospects away. Wills remarked, “It’s a huge blow for the industry,” adding that the tariffs would account for “10% of our sales,” which is especially concerning amid ongoing economic challenges. He further stated, “It’s clearly going to be a big blow, especially with the current economic headwinds that we’re all experiencing.”
The automotive industry is vulnerable. Before the pandemic, the UK was manufacturing over 1.5 million cars annually. Recently, production has declined down to about 800,000 vehicles. Matt Harwood, involved in the automotive supply chain, highlighted the precarious situation: “Covid-19, chip shortages, and broader supply chain disruptions have made volumes unpredictable in recent years. These new US tariffs slapped on top of that form of dumping could drive that number even lower. Due to our tight margins, this would be particularly devastating for smaller suppliers such as ourselves.”
Harwood expressed further concern over job security in light of these tariffs: “A further downturn in demand could quickly translate into job losses or even business closures. So our main concern is how the US tariffs put tens of thousands of jobs at risk within the UK automotive supply chain.” This sentiment strikes a chord with so many in this sector who are truly afraid of what these tariffs will mean for their livelihoods and businesses.
Even with these expected hurdles, some leaders in the industry are optimistic. Last year, the Welsh creative industries exported an equally stunning £2.2 billion worth of goods to the US. It was machinery and equipment exported almost exclusively, the product of small businesses. The adaptability of these small businesses will surely be pushed to the limit as they adapt to this new economic landscape.
The Scottish Whisky Association has recently announced major losses since the first tariffs went into effect. They found that £600 million in lost sales evaporated during the 18-month hiatus. Whisky producers who have for years relied on the US market to ride out tough economic times saw their fears legitimized by the recent announcement.