When President Donald Trump declared a 10% tariff on nearly all goods imported from the United Kingdom, this bipartisan action by the United States is a watershed moment in trade policy. This decision follows the UK’s significant export relationship with the US, which saw £9 billion worth of goods exported last year. The new tariff is bad news for everyone, but it’s lousy news for the food and drink sector. That’s because this creative industry exports billions of pounds of high-quality goods every year, including such culinary masterpieces as smoked salmon, Scotch whisky, and artisanal cheeses.
The tariff’s implications extend beyond mere numbers. DPS Designs’ small but crucial role in the thriving UK food and drink sector. The US market provides an important source of growth potential for the company. The service company has seen “ever-evolving” sales from the US and has seen a spike in inquiries since January.
DPS Designs certainly isn’t the only studio learning to operate in this new, post-pandemic landscape. Robinsons Brothers has reported receiving renewed interest from US clients, including two customers lost five years ago at considerable expense. As evidenced by the recent inquiries we’ve received, an encouraging trend is taking root. US demand remains robust, balancing out the overall negative economic prospects in important markets such as the UK, France and Germany.
These organic chemicals in fact represent the UK’s top goods export to the US. They exported £2.2 billion of goods directly supporting aircraft manufacture. Even still, the 10% figure is not trivial — it can have serious consequences for industries that depend on American consumers. Mike Hawes, an industry expert, expressed concerns about the potential impact on consumers:
“These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands.” – Mike Hawes
Food and beverage is another shining example exceptional products molded to American palates. Adam Sopher, a representative from Maeving, underscored his company’s plan for sustainable growth in the US market. Though prices have jumped recently, he’s still hopeful.
“But the US is the biggest popcorn market in the world so we had planned that a lot of our growth would come from there.” – Adam Sopher
Sopher explained that their transition from a 5.8% to a 10% tariff is less drastic than starting from zero. He warned of unanticipated downsides such as British exporters being caught out.
“Ironically it could be a good thing,” – Adam Sopher
Sopher pointed out that American retailers who might have previously sourced from Europe may now consider sourcing more from the UK due to these tariffs. Indeed, tariffs are creating issues with a supply chain, Seb Inglis-Jones added. He noted that these duties are still better than those imposed on countries such as China or India.
It’s not just food and drink – other industries are already being impacted by these punitive tariffs, as well. Businesses and corporations have had to reconsider how they price their products as they respond to the inflationary landscape. For instance, Maeving recently raised prices in the US market—not as a pre-emptive measure against tariffs but due to increasing operational costs.
The responses from UK businesses show a picture of resilience under pressure, coupled with acute concern over economic conditions. Though many companies have been able to pivot rapidly in light of new realities, many others are still faced with a time of lack and confusion. And for most businesses, the US will continue to be a critical market for their future growth.
The European Union is in reality hit by a much higher 20% tariff than the UK’s 10%. This gap could impact American consumers’ choices on where products are sourced from. Competition is increasing for UK firms. In order to attract the attention of American consumers looking to bypass tariff hurdles, they need to use their specialty to their advantage.
Here’s Sebastian Down.
“There was no-one you could speak to so it relied on me going onto the US department of whatever website, trying to look at lots of detail that basically didn’t exist,” – Sebastian Down
The current situation underscores the importance of strategic planning for UK exporters as they confront new challenges while exploring opportunities in the US market. New market conditions will likely drive changes in consumer demand and sourcing trends as well.