What will Trump’s Tariffs mean for the East?

A week is a long time in global politics. No sooner had Chancellor Rachel Reeves announced changes to the public finances in her Spring Statement than Trump announced his much-anticipated Tariffs on international trading competitors. As HMG carefully considers its response, it is already clear that the East will face significant impact.

Analysis from the Centre for Local Economy Studies reveals that the 10% tariffs imposed by the US on UK exports will hit hardest in parts of the UK outside of London. The tariffs will raise the price of British goods for American consumers, reducing demand. The West Midlands, East of England and Northern Ireland – regions most reliant on exports to the US – are expected to bear the brunt of the trade restrictions. The West Midlands is the number one exporting region for cars – which face a 25% tariff – and expected to be the worst affected region in the UK.

The East of England is also an area which exports significant goods from the pharmaceuticals, life sciences, aerospace and defence sectors. And of course, the East is home to Lotus Cars. The fall is likely to be nearly £240m per year, assuming an even mix of products exported across regions. Adjusted for population, the value of lost exports in the East is expected to be over £37 per person per year. This compares with £30 in England and £25 per person in London.

The Bank of England estimates an average fall in UK exports to the US at around 4% based on tariffs of 10%. The specific impact will depend on the composition of goods exported, fluctuations in currency exchange rates, and shifts in US consumer purchasing power.

Trump’s tariffs could significantly impact the East of England, in key industries like manufacturing and agriculture. The East of England has a strong manufacturing sector, with most areas of the East having a significant manufacturing presence. Trump’s tariffs would make UK goods more expensive in the US, reducing competitiveness and potentially cutting demand for exports from the region. UK firms that use Chinese components could face increased costs, which could either be passed on to consumers or eat into profits.

Many food products from the East of England, such as grains and dairy, are exported internationally, including to the US. If tariffs make UK products less competitive, local farmers may struggle with lower demand and falling prices.

Some economists are warning that these tariffs could push the UK toward a recession, knocking 1% of the economy according to the OBR and threatening jobs across various sectors – as many as 25,000 in manufacturing. The UK government is negotiating to reduce the impact, but without exemptions, businesses in the East of England could face serious financial strain, threatening job losses.

With potential retaliatory tariffs from the EU and China, supply chains could become even more unstable. Businesses in the East of England that rely on imports or exports could be caught in the middle of a global trade conflict.

Overall, Trump’s tariffs could lead to higher costs, reduced exports, and economic strain for key industries in the East of England. The UK government is trying to negotiate better terms, but businesses may need to adapt by diversifying markets or adjusting supply chains. The UK is still trying to negotiate sector focused trade deals, like tech, with the US which could help avoid direct tariff impacts. However, the UK will also need to urgently explore other routes to improve trade relations with Europe, South Asia and BRICs since it is smaller countries outside major trading blocs that will be most heavily impacted, even with preferential terms.

See the Business and Trade Secretary's statement to Parliament on the imposition of US tariffs.