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Free Malaysia Today
10 hours ago
- Business
- Free Malaysia Today
British exports to US suffer record hit from Trump tariffs
The US imposed 25% tariffs on British steel and aluminium and increased tariffs on imports of cars to 27.5%, all alongside a blanket tariff of 10%. (Reuters pic) LONDON : British goods exports to the US suffered a record fall in April after US President Donald Trump imposed new tariffs, official figures showed today, pushing Britain's goods trade deficit to its widest in more than three years. Britain exported £4.1 billion of goods to the US in April, down from £6.1 billion in March, Britain's office for national statistics said, the lowest amount since February 2022 and the sharpest decline since monthly records began in 1997. The £2 billion fall – a 33% drop in percentage terms – contributed to a bigger-than-expected drop in British gross domestic product in April. Last week Germany said its exports to the US fell by 10.5% in April, although that figure, unlike Britain's, is seasonally adjusted. The British Chambers of Commerce said the scale of the fall partly reflected manufacturers shipping extra goods in March to avoid an expected increase in tariffs. Even so, April's goods exports were 15% lower than a year earlier. 'The economic effects of the U.S. tariffs are now a reality. Thousands of UK exporters are dealing with lower orders and higher supply chain and customer costs,' the BCC's head of trade policy, William Bain, said. The US is Britain's largest single goods export destination and is especially important for car makers, although total British exports to countries in the EU are higher. Britain exported £59.3 billion of goods to the US last year and imported £57.1 billion. The US imposed 25% tariffs on British steel and aluminium on March 12 and in early April increased tariffs on imports of cars to 27.5% as well as a blanket tariff of 10% on other goods. Last month Britain agreed the outline of a deal to remove the extra tariffs on steel, aluminium and cars – the only country to do so – but it has yet to be implemented and the 10% tariff remains in place for other goods. Before the deal, the Bank of England estimated the impact of the tariffs on Britain would be relatively modest, reducing economic output by 0.3% in three years' time. Bigger trade deficit Thursday's data also showed that the fall in exports to the US pushed Britain's global goods trade deficit to £23.2 billion in April from £19.9 billion in March, its widest since January 2022 and nearly £3 billion more than had been expected by economists polled by Reuters. Excluding trade in precious metals, which the ONS says adds volatility to the data, the goods trade deficit was the widest since May 2023 at £21.6 billion. Britain's total trade deficit narrowed to £5.4 billion in April – also the widest since May 2023 – once the country's surplus in services exports is taken into account.
Reuters
13 hours ago
- Business
- Reuters
British exports to US suffer record hit from Trump tariffs
LONDON, June 12 (Reuters) - British goods exports to the United States suffered a record fall in April after U.S. President Donald Trump imposed new tariffs, official figures showed on Thursday, pushing Britain's goods trade deficit to its widest in more than three years. Britain exported 4.1 billion pounds ($5.6 billion) of goods to the United States in April, down from 6.1 billion pounds in March, Britain's Office for National Statistics said, the lowest amount since February 2022 and the sharpest decline since monthly records began in 1997. The 2 billion pound fall - a 33% drop in percentage terms - contributed to a bigger-than-expected drop in British gross domestic product in April. Last week Germany said its exports to the United States fell by 10.5% in April although that figure, unlike Britain's, is seasonally adjusted. The British Chambers of Commerce said the scale of the fall partly reflected manufacturers shipping extra goods in March to avoid an expected increase in tariffs. Even so, April's goods exports were 15% lower than a year earlier. "The economic effects of the U.S. tariffs are now a reality. Thousands of UK exporters are dealing with lower orders and higher supply chain and customer costs," the BCC's head of trade policy, William Bain, said. The United States is Britain's largest single goods export destination and is especially important for car makers, although total British exports to countries in the European Union are higher. Britain exported 59.3 billion pounds of goods to the United States last year and imported 57.1 billion pounds. The United States imposed 25% tariffs on British steel and aluminium on March 12 and in early April increased tariffs on imports of cars to 27.5% as well as a blanket tariff of 10% on other goods. Last month Britain agreed the outline of a deal to remove the extra tariffs on steel, aluminium and cars - the only country to do so - but it has yet to be implemented and the 10% tariff remains in place for other goods. Before the deal, the Bank of England estimated the impact of the tariffs on Britain would be relatively modest, reducing economic output by 0.3% in three years' time. Thursday's data also showed that the fall in exports to the United States pushed Britain's global goods trade deficit to 23.2 billion pounds in April from 19.9 billion pounds in March, its widest since January 2022 and nearly 3 billion pounds more than had been expected by economists polled by Reuters. Excluding trade in precious metals, which the ONS says adds volatility to the data, the goods trade deficit was the widest since May 2023 at 21.6 billion pounds. Britain's total trade deficit narrowed to 5.4 billion pounds in April - also the widest since May 2023 - once the country's surplus in services exports is taken into account. ($1 = 0.7364 pounds)
The Sun
20 hours ago
- Business
- The Sun
Reeves is waking up to grim reality check as GDP slumps – she revelled in spending splurge but it's downhill from here
Rachel Reeves revelled in a major spending splurge yesterday - but this morning she wakes up to a grim reality check. The Chancellor delighted in getting out the cheque book as billions of pounds were allocated to health and defence combined with shiny new infrastructure projects. 1 But today is a different story. The Chancellor says that the figures are "clearly disappointing" but it's a stark reminder of the fragility of the UK economy and how difficult it will be to turbo-charge growth. The effects of 'Awful April' - when a slew of added costs for business including that national insurance rise came in - has hit home. This Labour government has put that push for growth as their number one mission which will have the knock-on effect of driving up living standards. After a positive start to the year - where we saw growth up by 0.7 per cent - today we see it drop by 0.3 per cent for May. We shouldn't take one month's figures in isolation but the fear is conditions for business and entrepreneurs have hit them hard. The hike to national insurance contributions and minimum wage for firms kicked in at the start of April and this is how the economy has reacted. As the British Chambers of Commerce outline the NI rise has hit investment, recruitment and prices. The uncertainty of Donald Trump's tariffs is also a drag on the UK with the largest monthly fall on record in goods exports to the US. With dismal economic growth, the global trade war and stubborn inflation, the Chancellor will surely be left with little choice but to cut spending or raise taxes in the autumn. Ms Reeves has iron-clad fiscal rules she insists are non-negotiable so it feels inevitable something will have to give. A cruel summer of speculation is on the cards.
Telegraph
2 days ago
- Business
- Telegraph
Businesses ask just one thing from Rachel Reeves
The Chancellor is about to unveil her spending review. We know that business will welcome some of Rachel Reeves 's decisions – £113bn of capital investment and £86bn of research and development spending are not to be sniffed at. The British Chambers of Commerce represents 50,000 companies and I have already congratulated the Government on these investments. These are real, tangible steps that will help to drive growth throughout the economy. Importantly, those investments represent spades in the ground and projects that will benefit not just their local areas, but the entire country. The Government committing £14.2bn to the Sizewell C nuclear power station is a perfect example, and will help to create thousands of new jobs. But our members are clear, there is more to be done if the Government is to deliver an improvement in growth. Whether it's ever-increasing costs, a difficult labour market or crippling barriers to trade, British companies face serious challenges. Our latest research shows that less than half of businesses predict their turnover will grow this year. Just think about that. It means most businesses, when asked, believe that at best they will stand still. And standing still, with inflation pushing up costs, in reality means falling further and further behind. The cost of doing business has never been higher. From energy prices to National Insurance, companies are being hamstrung by factors outside their control. Previously profitable companies are stuck treading water and two in every three businesses say that tax is their biggest concern. On top of that, the Government is pushing ahead with its employment reforms. By its own measure, this will be another £5bn cost to business – and that's just the early estimate. Make no mistake, this continual piling up of costs cannot continue. And while the spending review is important, it's the Budget that fills business with dread. Another round of revenue-raising off the backs of Britain's entrepreneurs could put thousands of firms under. For many, there is nothing more to give. That's why we have one simple ask of the Government: no new taxes on business. Businesses can't afford it. The country can't afford it. Any additional pressure would damage what the Government says is its main priority: growth. Private enterprise is the real engine at the heart of our economy. It's our responsibility to make sure it has what it needs to succeed. Every week, I see first-hand the huge impact cost pressures are having on companies, particularly the National Insurance increase. From a manufacturer in the East Midlands being forced to make redundancies, to a logistics company in Aberdeen having to scale back its investment in projects. Companies are being buried under an avalanche of costs and we need the Government to publish a roadmap for how it will reduce the tax burden on businesses over time. No new taxes has to be the starting point. But to drive growth in the years ahead, the Government needs to lower cost pressures on companies. Despite the challenges, the pain and the pressures business owners face, what strikes me when I speak to founders and chief executives is how optimistic they remain. They still believe in themselves, and they still believe in Brand Britain. They don't want handouts from the Government but they do need ministers to look again at how they can relieve some of the cost pressures over which they have influence. If the Government gets that right, the rewards will be immense. Businesses just need to be given more opportunity. If they are given a chance, then they will seize it.
The Guardian
19-05-2025
- Business
- The Guardian
Labour will hope EU deal is final piece of jigsaw to boost economy
Monday's EU-UK reset deal will not instantly produce the growth Labour sorely needs to fulfil its promise to voters, but ministers hope it marks another incremental step on the road to a more optimistic economic future. Three aspects of the agreement have been particularly welcomed by business, and form the core of the economic package – although many details remain to be negotiated. The first is the long-hoped-for agreement to create a common sanitary and phytosanitary (SPS) area, under which cumbersome checks on food and agriculture products will be lifted, in return for the UK aligning with EU standards in these areas. Boris Johnson, presenting his trade and cooperation agreement (TCA) with the EU on Christmas Eve 2020, wrongly claimed there would be 'no non-tariff barriers to trade'. In practice, these barriers – including veterinary checks – have been hugely damaging, and a SPS deal is aimed at dismantling some of them, for this key sector. The British Chambers of Commerce, which has long drawn attention to the frustrations suffered by UK exporters, called the prospect of an SPS agreement 'a huge boost' that would 'cut costs, reduce waste and increase sales'. In a clearer statement of the hit to exports from Brexit than the ever-cautious Labour has usually allowed itself, the press release accompanying the deal mentions 'the 21% drop in exports and 7% drop in imports seen since Brexit'. Enthusiasts for a closer economic relationship hope that this approach – aligning on rules in exchange for more frictionless market access – could be a model for other sectors in future. The second aspect of the deal that carries economic weight is an agreement to cooperate more closely on energy policy, including aligning the EU and UK emissions trading schemes. The agreement should, the government says, 'create the conditions for goods originating in our jurisdictions to benefit from mutual exemptions from the respective EU and UK carbon border adjustment mechanisms (CBAM)'. In practice, the UK government claims that will mean the steel industry escapes £25m a year in levies that the EU would otherwise have imposed, via the CBAM – a policy aimed at ensuring heavily polluting products cannot enter the EU and undercut domestically produced equivalents that have paid to offset their emissions. Third, the UK hopes the agreement to negotiate over the possibility of defence industry cooperation will mean UK firms being able to bid for projects procured via the planned EU Security Action For Europe (SAFE) fund, which will allow member states to borrow to pay for weapons. The language on this in the EU-UK agreement is scant: the two sides agree to cooperate on 'security and defence initiatives, including on defence industry', and they commit to 'swiftly explore any possibilities for mutually beneficial enhanced cooperation created by the SAFE instrument'. But ministers clearly believe this could open the way for UK defence companies such as BAE Systems to profit, as defence spending ramps up on both sides of the Channel. The fury about fishing rights, which held up the final agreement, has little to do with economics and everything to do with the political symbolism of the sector. Research by the Resolution Foundation found that fisheries had actually been one of the industries worst affected by Johnson's Brexit deal, with output perhaps 30% lower than it might otherwise have been. Given how rapidly fish needs to get to market, Labour argues that eliminating cumbersome food checks under the SPS deal will benefit the sector more than allowing EU boats access to UK waters for another 12 years. (It may also have the positive political side-effect of preventing regular rows about fish from spilling out into the headlines.) Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion While the UK can point to clear economic wins from the deal, economists believe its direct impact on GDP growth is likely to be small, given the government's clear determination not to rejoin the single market or customs union, to avoid having to sign up to the free movement of people. Nevertheless, the government claims the reset will 'help make food cheaper, slash red tape, open up access to the EU market and add nearly £9bn to the UK economy by 2040'. That's a modest but worthwhile boost of about 0.3% to GDP, over the next 15 years. John Springford of the Centre for European Reform, whose analysis suggests the UK economy is approximately 5% smaller than it would otherwise have been as a result of Brexit, suggests that it still looks relatively generous. He recently forecast that a generous youth mobility scheme might increase the size of the economy by 0.45% over the next decade, while an SPS agreement would add less than 0.1%, for example – making 0.3% look a stretch. However, Labour hopes the economy will gain something more nebulous, which it is harder to plug into a model: a growing acknowledgment from the business sector that the UK is an appealing investment proposition. Before coming to power, Rachel Reeves and Keir Starmer hoped the credibility of a steadier hand on the tiller than the Tories would win over investors, whose confidence they see as key to the UK's recovery. Instead, Labour swept into power on a wave of dire warnings about the state of the economy, blindsided businesses with tax rises, and saw GDP continue to flatline. Now, they hope the triumvirate of the India-UK trade deal, the US tariff agreement with Donald Trump and the EU reset will burnish their reputation as calm and competent stewards of the economy, helping to generate a glimmer of optimism, in a highly uncertain world.
