The UK faces a potential £22bn blow to exports if Donald Trump implements a sweeping 20% tariff on all imports into the US, according to a new analysis by the University of Sussex’s Centre for Inclusive Trade Policy (CITP). The report warns that a reduction in trade with the US, alongside global ripple effects, could lower UK exports to the world by more than 2.6%, severely impacting the UK’s economy.
President-elect Trump’s campaign pledge to impose a 20% tariff on all imports—alongside a 60% tariff specifically targeting Chinese goods—raises the possibility of unprecedented trade barriers. This potential reduction in trade would lead to a decline in UK economic output by around 0.8% annually, according to CITP researcher Nicolo Tamberi.
Sector Impacts and Global Ripples
UK sectors with significant exposure to the US market, including fishing, petroleum, and mining, could see exports shrink by nearly a fifth. Other sectors like pharmaceuticals and electrical goods would also be affected. The study highlights that even non-exporting businesses could feel the effects through weakened trade-related services such as transportation, insurance, and finance, which are integral to supporting goods trade.
However, the report notes that some sectors could experience benefits. For example, UK textile and clothing manufacturers might find new opportunities as reduced Chinese exports to the US ease competitive pressures in these markets.
Trade Policy Choices and Global Consequences
The UK may face a difficult choice: pursuing a bilateral exemption deal with the US or aligning with European and other Western allies to communicate to the Trump administration that American exporters would suffer under a large-scale tariff policy. The CITP analysis focuses solely on the impact of US tariffs and does not factor in potential retaliatory tariffs from Europe or Asia.
The International Monetary Fund recently cautioned that an escalating trade war could drive inflation globally and shrink the world economy by 7%—a figure roughly equivalent to the combined economies of France and Germany. As Trump prepares to re-enter the White House, economists and diplomats alike are watching closely, knowing that his trade decisions could have far-reaching impacts on the global economy.
