Exports to US slump at record pace in ‘payback' after rush ahead of tariff hikes

Yahoo

a day ago

British exports slumped by nearly 9% in April after a record drop in goods exported to the US following President Donald Trump's move to hike tariffs, official figures have shown.
The Office for National Statistics (ONS) said the value of goods exported to America tumbled by £2 billion in April – the fastest pace since records began in 1997.
The drop was led by machinery and transport, including cars, according to separate trade figures from the ONS on Thursday.
The value of goods exports to the US are now at their lowest level since February 2022, it added.
In total, exports of UK goods in April fell 8.8%, or by £2.7 billion, to £13.7 billion.
It follows four months in a row of rising US exports as American importers stocked up ahead of Mr Trump's tariff rises, which came into effect at the start of April.
Imports of goods from the US, including precious metals, also fell in April, down by £400 million.
ONS director of economic statistics Liz McKeown said: 'After increasing for each of the four preceding months, April saw the largest monthly fall on record in goods exports to the US with decreases seen across most types of goods, following the recent introduction of tariffs.'
Exports to the US of machinery and transport equipment, and material manufactures, both tumbled by £800 million in the month, with car exports heavily down.
But the ONS said there was also a significant drop in car exports to the European Union in April, with a £900 million decline for machinery and transport.
Overall, total goods exports to the EU fared even worse in April, down by £2.1 billion or 12.6%.
Mr Trump unleashed so-called reciprocal tariffs on America's largest trading partners at the start of April, including the UK.
Britain has since struck a deal that will see UK exports avoid the worst of the trade duties, with a baseline tariff of 10% and exemptions for some key goods, such as steel and aluminium and removing tariffs on UK aluminium and steel exports.
But these tariff reductions have not yet come into effect, with aims to finalise the deal by July 9.
Experts said last month saw 'payback' for a rush to beat the US tariff hikes earlier in the year.
Sandra Horsfield, an economist at Investec, said: 'Distortions around known deadlines were always going to take place and always going to be followed by payback – no matter where, in the end, tariffs landed.
'The bigger question will be how output fares in the coming months, once these temporary effects fade.
'The UK may have secured an agreement to shelter the first 100,000 of cars (roughly the existing level of its car exports to the US) at lower tariffs than other countries face, but this is yet to be signed off by President Trump.
'What will remain is uncertainty over tariffs more widely and importantly the indirect impact this will have on the UK economy,' she added.
The ONS figures showed the total goods and services trade deficit widened by £4.9 billion to £11.5 billion in the three months to April, as the rise in imports outweighed the rise in exports.
The trade in goods deficit widened by £4.4 billion to £60 billion in the three months to April, while the trade in services surplus is estimated to have narrowed by £500 million to £48.5 billion.