Aston Martins and Scotch whisky are likely to become more expensive in the US under Donald Trump.
Car manufacturing and the food and drink industry are among the UK sectors most impacted by the US president’s wave of new tariffs. All export billions of pounds worth of good to the US every year, which will now be subject to 10pc import taxes.
Economists believe this will in practice lead to lower sales, dealing a significant blow to some British industries.
The UK sold £58.7bn worth of goods to the US last year, making America the largest export market for British goods, excluding the EU. 16.1pc of all items sold abroad went across the pond.
While only one in 10 UK businesses export goods, deep-pocketed American consumers are a lifeline for some. This is how key British industries are likely to fare:
The automotive industry
Britain’s auto industry is one of the biggest victims of Trump’s “liberation day”. UK car manufacturers sold £9bn worth of vehicles to the US last year, making it Britain’s largest single export.
Americans are particularly fond of highly customised British luxury cars. A third of Aston Martin’s revenue came from the US last year, while Jaguar Land Rover (JLR) sold more than one in five cars to Americans in 2023.
Trump has already announced tariffs of 25pc on all foreign car imports and British manufacturers face “extreme pressure” as a result, the Institute for Public Policy Research warned this week.
The think tank predicts 25,000 jobs are at stake, with workers at JLR and the Cowley Mini factory the most exposed.
A spokesman for JLR said: “Our luxury brands have never been stronger and we will address the new US trading terms when they come into force.”
The Society of Motor Manufacturers and Traders (SMMT) described the new tariffs as “deeply disappointing”.
Mike Hawes, SMMT chief executive, said: “The announced imposition of a 10pc tariff on all UK products exported to the US, whilst less than other major economies, is another deeply disappointing and potentially damaging measure.
“Our cars were already set to attract a punitive 25pc tariff overnight and other automotive products are now set to be impacted immediately. While we hope a deal between the UK and US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds.
“These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.
“Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic.”
Aircraft
Britain is one of the world’s largest aerospace exporters, being home to companies like BAE Systems and Rolls-Royce. Aircraft exports accounted for £2.2bn of goods sold to the US last year.
As well as home-grown companies, France’s Airbus also has a factory in Broughton, Wales, which supplies wings for its A320 jets to factories in the US. Most of the other parts are also imported from Europe.
The manufacturer’s larger planes, which are used on long-haul routes, are all built outside the US and come with engines from Rolls-Royce, which together with the wings from Wales gives them a 30pc British content.
Guillaume Faury, Airbus’s chief executive, said last month: “It is really an integrated ecosystem across the North Atlantic and we believe tariffs in this industry would be lose-lose.”
An Airbus spokesman said the company was assessing the likely impact of tariffs on its operations and supply chain, and working with US airline customers “to evaluate how best to navigate these evolving conditions.”
The company said it remains committed to its US and Canadian plants, having made “significant investment in jobs, innovation and the manufacturing supply chain.”
Food and drink
In Scotland, whisky makers know the price of US tariffs all too well. The industry suffered a £600m blow from higher tariffs during Trump’s first stint in the White House and face another blow.
America is the top export destination for Scotch, accounting for £1bn a year.
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.”
It’s not just whisky: a tenth of all British food and drink exports end up on US shelves. This includes 460m cups of tea and 436m biscuits, according to the Food and Drink Federation.
Tom Athron, the chief executive of Royal grocer Fortnum & Mason, said this week that the price of its jams, teas and other staples would have to rise in the US as a result of tariffs.
He told The Telegraph the US was “a really important market for us”.
Aluminium and steel
Trump hit all steel and aluminium imports with a 25pc tariffs last month, hitting £470m of British trade with the US. The White House confirmed that imports would only be subject to this levy, rather than incurring an additional 10pc tariff.
The bosses of Tata Steel and British Steel said they instantly saw a drop-off in customers as a result of the tariffs, with cancelled orders and requests for refunds.
British Steel blamed tariffs earlier this month as it announced plans to shut the country’s last two remaining blast furnaces.
UK steel has described the levies as a “sledgehammer” for the sector. Some 5pc of UK steel exports and 6pc of aluminium exports are sold to the US, although trade bodies believe the figures are in actuality higher.
Gareth Stace, UK Steel boss, said:“The UK Government must continue its efforts to strike a deal with the US, but we recognise that this requires willingness from both sides. Domestic trade policy on the other hand is entirely within the Government’s gift and it can immediately take action to strengthen our trade defences.”
While the direct impact is relatively small in pound terms, the use of these materials in other products means a further £2.2bn of exports have been caught by the new levies
Relief for pharmaceuticals
The US is the biggest buyer of British pharmaceutical, including vaccines, medications and bandages. Medicinal and pharmaceutical products accounted for £6.5bn of exports to America last year.
Separate figures show that a quarter of Britain’s chemicals exports go to the US, with pharmaceuticals accounting for more than half of that.
This leaves some of Britain’s most valuable companies exposed to Trump’s decisions. GSK makes more than half of its sales in the US and AstraZeneca two fifths.
Speaking earlier this year, Dame Emma Walmsley, GSK chief executive, pointed out that “medicines traditionally have been excluded from global tariffs in recognition of the fact that it matters for patients.”
However, there were fears ahead of Trump’s announcement that he would target drugs. The US president had said he would be “announcing [tariffs on] pharmaceuticals at some point – because we have to have pharmaceuticals”.
Despite this, a fact sheet circulated by the White House suggests pharmaceuticals will not be hit by the import tariffs.
