Trump's tariffs would 'hit UK trade as hard as Brexit'

Donald Trump’s threatened tariffs could hit UK trade with the US as badly as Brexit affected trade with the EU, a leading think tank has warned as campaigners call for Sir Keir Starmer to protect the UK by urgently rebuilding ties with Europe.

- ARCHIE MITCHELL DAVID MADDOX

The president-elect has threatened to impose tariffs of between 10 and 20 per cent on all imports to the US when he returns to the White House, with experts warning of a tit-for-tat global trade war that would fuel another spike in inflation. And, in a bombshell report published today, the Resolution Foundation said the impact of Trump’s plans would hit UK firms as hard as the trade barriers that came into place after Brexit.

In a warning to Sir Keir ahead of Mr Trump’s inauguration next month, the Resolution Foundation said building closer ties with the EU “should remain a priority”, with 47 per cent of all UK exports heading for the bloc. Its report noted that the impact on firms that export goods to the US under Mr Trump’s plans could be devastating, with 10 to 20 per cent tariffs on goods being roughly equivalent in scale to the non-tariff barriers that Brexit imposed on goods sales to the EU.

And it said if Mr Trump pursues “super-tariffs” on rivals such as China, leading to retaliation, “the knock-on effects could be darker still”. “No longer part of a large trading bloc, the UK would then face sharp dilemmas in a scramble to retain access to overseas markets and its flow of imports,” the report said. The picture is particularly stark for small traders, with goods sales to Europe among smaller businesses having fallen 30 per cent since Brexit – with 20,000 companies stopping exporting to the continent altogether.

Resolution Foundation senior economist Emily Fry said: “While Trump tariffs wouldn’t affect the UK economy as a whole as much as Brexit, their effect on firms who sell goods to the US could be stark.”