Trump tariffs are a 'lose-lose' situation says Greater Birmingham Chamber of Commerce

Last night (April 2) US President Donald Trump announced a wide ranging new set of tariffs on imports into the USA, arguing that they would allow the country's domestic economy to flourish.

The tariffs include a baseline rate of 10 per cent, which imports from the UK are subject to, with higher rates for other countries based on so-called 'reciprocal' rates. Imports from the European Union face a 20% tariff.

However the UK is also affected by an across-the-board 25% rate on car exports to the USA, designed to boost American car manufacturing.

Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, urged the UK government to provide "practical support" to Midlands firms dealing with the new tariffs.

“This is a ‘lose-lose’ situation for everyone and we urge the government to do all it can to provide support to UK businesses making difficult decisions today about trade with the US," she said.

“We also encourage Greater Birmingham firms to immediately start negotiations with their US customers on managing the impact of these tariffs, if their contacts allow.

“Longer term, they may want to explore alternative markets, especially the EU, CPTPP countries or those where we're expecting other trade deals to be made later this year."

The UK Government has ruled out imposing retaliatory tariffs while talks on an economic deal with the US continue, and are hoping for further relief for UK companies, which export more than £60bn worth of goods to the US each year.

At Prime Minister's questions this week, Kier Starmer said a potential trade war with the USA was in "nobody's interest" and said the government would be taking a "pragmatic approach" to a trade deal.

“Constructive talks are progressing to agree a wider economic prosperity deal with the US. That is why we are working with all industries and sectors likely to be impacted," he said.

“Our decision will always be guided by our national interests, and that’s why we have prepared for all eventualities, and we will rule nothing out.”

The 25% tariff on car exports to the US is likely to hit the West Midlands in particular, with several large manufacturers based in the region including Jaguar Land Rover, Aston Martin and Morgan. The US is Britain’s second largest car export market after the EU, with more than 101,000 cars exported in 2024, representing 16.9% of the total number exported from the UK.

Last week, Jaguar Land Rover, which has manufacturing operations in Wolverhampton and Solihull, said it was "assessing options" ahead of the tariff announcements. 

“A global trade war would likely give a significant knock to UK GDP and that have repercussions for the Chancellor's fiscal headroom - if that gets wiped out then we would be looking at either more spending cuts or more tax rises," added Ms Stubbs.

“The UK government must remain level-headed and continue to work with the US administration to find a mutually beneficial agreement on tariffs and trade that provides certainty for both businesses and consumers on the future landscape for international trade.”