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Trump's tariffs are a 'lose-lose' - West Midlands business leaders react to the new import tax
2025-04-13 23:49:10
Global stock markets have tumbled while local manufacturers such as JLR and JCB have started assessing their business activities as President Donald Trump imposes a new raft of import tariffs.
After being announced in February, the tariffs came into force over the past few days and have seen goods imported into the US from the UK hit with a baseline tariff of ten per cent.
However, this rises to 25 per cent for all foreign-made vehicles entering the US, prompting Coventry-headquartered JLR to pause its exporting activities into America.
And like JLR, Warwickshire sports car brand Aston Martin does not have a factory in America, meaning the fiscal implications could be even greater, especially as the US market represents around 30 per cent of its annual sales.
The UK has got off light compared to the other countries and regions, with China being hit with a 34 per cent tariff, 20 per cent for the EU and a whopping 46 per cent for Vietnam - prompting fears of a 'global trade war'.
Business leaders in the West Midlands have been reacting to the new tariffs coming into force and the potential implications going forward.
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Emily Stubbs, head of policy at Greater Birmingham Chambers of Commerce, described it as a "lose-lose" situation for everyone and urged the UK Government to do all it could to provide practical support to businesses now making difficult decisions about trading with the US.
"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," she said.
"Longer term, they may want to explore alternative markets, especially the EU, countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or those where we're expecting other trade deals to be made later this year.
"The Bank of England cited intensified uncertainty in global trade as one of the reasons to hold off on lowering interest rates last month. They'll be carefully monitoring the impact of these tariffs, particularly on inflation and employment, as they consider future rate cuts.
"A global trade war would likely give a significant knock to UK GDP and that could 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.
"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."
Janie Frampton, president of the Greater Birmingham Global Chamber of Commerce, said: "The ten per cent tariff on goods imported from the UK into the United States is unhelpful but is significantly lower than has been imposed on many other major US trading partners, including the EU.
"However, there is no escaping the fallout from these decisions, which will increase the risk of trade diversion and cause great uncertainty for business communities across the world.
"The Government has kept a cool head during negotiations so far and getting the best deal for the UK is what matters most.
"It is vitally important the Government does not give up on negotiations and, in the meantime, provides the necessary support to impacted businesses. Tariffs can be lifted at any time and the US has left the door open to do some form of deal with us."
David Morris is head of the Midlands operation for financial and business services firm PwC in Birmingham.
"The announcement of tariffs will have a significant impact in the UK, and especially in the West Midlands, where we have strong manufacturing and automotive roots," he said.
"This presents new and immediate challenges for business. Cars make up 49 per cent of the exports from the West Midlands to the US which represents five per cent of the region's GVA.
"To successfully navigate through this uncertain period, business leaders will need to make strategic decisions which consider how they source, price and manage risk. Being agile and resilient will be essential.
"Looking ahead, close collaboration across policy makers, business and education providers will ensure the West Midlands can continue to build on diversifying its offering - strengthening our professional and financial services and supporting our growing technology sector."
David Hooper is the managing director of Hooper & Co, a Warwickshire-based international trade consultancy.
He has warned UK exporters to review their export documentation urgently or risk being hit with tariffs of up to 54 per cent due to supply chain "blind spots".
Mr Hooper said it was crucial firms were aware that tariffs would be applied based on the country of origin, not the country of export.
"We're urging all UK exporters to immediately audit their supply chains and ensure they have robust documentation in place, especially when it comes to the origins of goods and any potential blind spots that could incur unexpected charges," he said.
"A product made in China but re-exported from the UK will face a tariff of up to 54 per cent unless it qualifies under origin rules as having been substantially transformed in the UK.
"If your paperwork doesn't prove UK origin, your goods could be incorrectly classified and your business could be hit with extra costs and delays.
"With such short implementation timelines and variable tariff rates depending on origin, this is one of the most challenging compliance environments UK exporters have faced in recent years. UK businesses must therefore act now to protect their margins and avoid disruption.
"UK manufacturers who can demonstrate clear origin have a potential competitive edge in the US market but only if they get their documentation right."
Looking further ahead, he added: "China is expected to respond with countermeasures and the EU has already signalled its intention to introduce tariffs of its own.
"UK exporters are entering a period of heightened regulatory complexity and trade volatility. It's so important they have a solid understanding of their current activity and processes to avoid any further headaches."
Johnathan Dudley, is a partner and the head of the manufacturing team at accountancy group Crowe in Oldbury.
He said it was vital for companies to focus on seizing opportunities to promote more UK and European manufacturing.
"You cannot control what you cannot control so it's important for UK businesses to concentrate energy and efforts on what they can," he said.
"For UK industries, including steel production, processing and the automotive supply chain, the tariffs come at a challenging time.
"It'll be key for these industries to assess their options and explore diversification - particularly in light of the UK government's increase in defence spending and healthcare.
"Outside automotive, a ten per cent tariff arguably gives UK companies a competitive advantage over those with higher tariffs such as the EU or China.
"For all sectors, the opportunities of trading outside the USA present themselves - Canada and Mexico, for example, are vast countries with demand and resources."
Separately, Staffordshire digger manufacturer JCB has confirmed it will double the size of a new factory currently under construction in Texas as the company says the tariffs will impact its business in the short-term.
JCB has been manufacturing in the US for 50 years and in 2024 bought 400 acres of land in San Antonio after recognising the need to produce even more machines in North America.
It currently has a plant in Georgia which it has operated for 25 years and employs around 1,000 people.
The original plan for a 500,000 sq ft factory in San Antonio has now been revised up to one million sq ft at a cost of around £390 million. Production is due to start next year and it will employ up to 1,500 people.
JCB chairman Anthony Bamford said: "JCB has been in business for 80 years this year and we are well accustomed to change.
"The United States is the largest market for construction equipment in the world and President Trump has galvanised us into evaluating how we can make even more products in the USA which has been an important market for JCB since we sold our first machine there in 1964."
Chief executive Graeme Macdonald said: "In the short term, the imposition of tariffs will have a significant impact on our business. However, in the medium term, our planned factory in San Antonio will help to mitigate the impact.
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