‘Devastating’: Business groups warn Trump tariffs will deal major blow to UK firms

Business groups have warned that Donald Trump’s rates will have a ‘devastating’ impact on British firms that are already struggling with a sluggish growth.

Experts have also warned about more turmoil in the financial markets, as investors respond to the diverse measures that affect world trade.

Mr. Trump confirmed that a 10% tariff is set on US imports of UK goods – the same level as the global “baseline” he has introduced for countries around the world.

Meanwhile, a 25% import tax has been confirmed for steel, aluminum and cars.

The Federation of Klein Enterprises (FSB) warned that the move would handle a ‘big blow’ for small and medium businesses, which already has the pressure of the house.

Currently, 59% of small UK exporters in the US market, the FSB said.

FSB policy chair Tina McKenzie said: “Rates will cause inexplicable damage to small businesses trying to make a profit while the domestic economy stays flat,” FSB policy chair Tina McKenzie said.

‘The fallout will impede growth, harm opportunities and put a serious dive into the global economy.

“The British government must now be ready to provide first aid to any SMEs that are at risk of collapsing.”

Influential business group, the Confederation of British Industry (CBI), said the announcements are ‘deep worrying’ for businesses and that this is likely to have worldwide consequences.

CBI CEO Rain Newton-Smith said that a “cool and tranquil response from the British government is the right reaction”, adding: “British firms need a measured and even approach that avoids further escalation.

“Requirement will only contribute to the supply chain, the course of investment and the volatility of the stoke in prices.”

Other experts have suggested that British firms exporting to the US be forced to review their trade transactions with the world’s largest economy.

Emma Rowland, trade policy advisor at the Institute of Directors, said: “The US is the largest single trade partner of the UK, and a major export market for UK industries, especially car, pharmaceuticals, chemicals and whiskey.

“Exporters to the US will be forced to review the viability of the US as a destination for their goods and as a supply chain.

“Alternatively, they may need to reduce their profit margins to stay competitive.”

Meanwhile, analysts said the full range of rates caused fresh concerns in the financial markets.

Susannah Streeter, head of money and markets for Hargreaves Lansdown, said: “Since threats have changed in facts, the plan for blanket tariffs on US trading partners has unnoticed.”

Futures trading – indicating that stock movements are open before the markets – for the US’s S&P 500 index fell 1.7% on Wednesday night.

The US dollar also weakened against the pound and the euro.

But the UK may have been saved from the pain facing other countries, Mr. Streeter suggested.

“It seems that the UK has gained a better hand compared to some countries, but since it is so intertwined with the global economy, a clothing on growth seems inevitable,” she said.

“The government takes a pragmatic approach and hopes for a trade agreement, which can relieve more of the tariff burden, but the result is uncertain.”