A snap poll, by the British Chambers of Commerce award-winning Insights Unit, of more than 600 business has revealed the extent to which UK firms expect to be hit by US tariffs.
Using its unique access to companies in the Chamber Network, the research was rapidly carried out as news emerged of retaliatory action by China.
It showed that 62% of UK firms with trade exposure to the USA are taking a hit from the tariffs. Looking at the breakdown, 20% report a significant negative impact, 42% report some negative impact, 16% report no impact, 5% report some positive impact, and 2% significant positive impact.
The survey also showed that 40% of firms considered the 10% tariff to be better than they had been expecting.
Alongside increasing prices, 15% said they would seek alternative suppliers, while 13% said they expected to absorb the costs. Around a third (36%) said they would take no action at this time. This is in contrast to firms without exposure to the USA, 72% of whom said they would not take action.
Responding to the findings, Shevaun Haviland, Director General of the BCC, said: “This data sets out very clearly the immediate impact of US tariffs and the extent of business concern. With retaliatory moves by other countries likely to escalate, the prospect of a global trade war is increasing, alongside a widening of the economic fallout.
“But there is strong support for the Government’s approach to continue negotiation and not immediately retaliate. We believe a deal can be done as the US has already been open to talks. But firms don’t want to have all our eggs in one basket and want to see closer trading relationships with the EU and other markets.
“They do not consider this to be an either/or scenario and we must continue to pursue a three-pronged approach of better trade relations with the US, the EU and the Indo-Pacific region.
“This survey also gives an early warning sign on the economic impact in the UK of these tariffs, with price increases being the most likely response by firms.
“Other costs are ramping up, with higher National Insurance Contributions chief among them. Businesses are facing increasingly tough conditions and investment will inevitably suffer.
“But a recession is by no means guaranteed. The government must do all it can to head that off by providing practical support around infrastructure projects, reforming business rates and cutting red tape in the right areas.
“It must also stick firmly to its pledge of no further tax rises for business in the autumn budget and instead consider all its fiscal options.”
