Businesses warn of 'untold damage' caused by Trump's tariffs - but call for Starmer to 'keep cool and push for a deal'
2 April 2025, 22:57
Business groups have warned of the "untold damage" that Donald Trump's tariffs will cause the UK.
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Trump said that UK businesses selling to the US would face tariffs of 10% from now on, part of a sweeping package of tariffs on countries across the world. All imports of foreign cars will also face 25% tariffs.
Many countries and trading partners, including the EU, have fared considerably worse, and sources within the government said that this vindicated its relatively conciliatory approach to Trump's administration.
But several British trade groups said that the tariffs would be "devastating" to their members.
Some also called for support for businesses from the government, while others also called for the government to keep working with the US for a trade deal.
Read more: 'Liberation Day' explained: What are Trump's tariffs and how will they impact the UK?
Expert analysis of Trump's tariff announcement
Shevaun Haviland, director general of the British Chambers of Commerce, has said Donald Trump's imposition of tariffs was a "lose-lose situation for everyone".
She said: "The Government has kept a cool head so far and must continue to negotiate. This is a marathon not a sprint, and getting the best deal for the UK is what matters most.
"But no-one will escape the fallout from these decisions, there will be an increased risk of trade diversion, and it will wreak havoc on businesses communities across the world. Orders will drop, prices will rise, and global economic demand will be weaker as a result. This is a lose-lose situation for everyone.
"So, it is vitally important that the government does not give up on negotiations. Tariffs can be lifted at any time and the US has signalled its willingness to do some form of deal with us.
"The UK is not without influence, our bilateral trade with the US is worth £300 billion, we have £500 billion invested there and it has £700 billion tied up in our economy. There is a high-level of co-dependency and we are speaking to businesses across the UK on options for Government to consider.
Instant reaction to Trump's tariff announcement
"There are no winners in the current scenario, negotiations will take time and will inevitably involve compromise. Any decisions on taxes will need to be taken very carefully, and the government must consider all its fiscal options. It should keep everything on the table during talks, but retaliatory tariffs should only be a last resort.
"Many firms, especially SMEs, will now be facing difficult decisions and we urge government to do all it can to provide practical support to them."
Meanwhile the Confederation of British Industry (CBI) said that UK businesses need a "measured and proportionate approach" to the tariffs.
Rain Newton-Smith, chief executive of the CBI, said: "Business has been clear: there are no winners in a trade war. Today's announcements are deeply troubling for businesses and will have significant ramifications around the world.
"A cool and calm reaction from the UK Government is the right response: UK firms need a measured and proportionate approach which avoids further escalation. Retaliation will only add to supply chain disruption, slow down investment, and stoke volatility in prices.
"The Government has rightfully tried to negotiate a carveout to any incoming tariffs through a bilateral economic deal. As they seek to grow the economy, negotiating stronger trading relationships with all like-minded partners will be foundational to any success.
"The UK must use this unpredictable period to double down on its commitment to free, fair and open trade. Doing so will provide businesses with the confidence needed to kickstart growth, foster innovation, and boost productivity."
Trade experts answer your questions about Donald Trump's tariff plan
A group that represents small and medium businesses said that the tariffs would cause "untold damage" to many of their members who are already struggling.
Currently, 59% of small UK exporters sell into the US market, the Federation of Small Businesses (FSB) said. "Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat," Tina McKenzie, the FSB's policy chair said.
"The fallout will stifle growth, hurt opportunities, and put a serious dent in the global economy.
"The UK Government should now be ready to provide emergency assistance to any SMEs at risk of collapse."
The US is a key export market for Scotch whisky producers, who will now face having their drink become more expensive for consumers across the Atlantic.
A spokesman for the Scotch Whisky Association said: "The industry is disappointed that Scotch whisky could be impacted by these tariffs.
"We welcome the intensive efforts by the UK government to reach a deal with the US administration, and we continue to support this measured and pragmatic approach towards a mutually beneficial resolution."