British firms that have been battered by Donald Trump’s announcement of tariffs on exports to the US will be given billions in government support.
Like almost every other country in the world, the UK is now contending with 10% tariffs on almost all the products it ships out to the US – which was its largest single-country trading partner last year.
The move has left many businesses concerned about the rapidly shifting market and whether they can cope with a potential fall in demand from across the Atlantic.
Particularly affected are those hit by the additional 25% tariffs on steel and aluminium products and cars.
Today, the Treasury announced UK Export Finance (UKEF) will get the power to increase its support for businesses by £20 billion – with up to £10 billion for those ‘significantly impacted in the short term by the current situation’.
UKEF, a department of the British Government, aims to ensure ‘no viable UK export fails for lack of finance or insurance’ by smoothing out the challenges involved.
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Alongside that support, the British Business Bank will expand its Growth Guarantee Scheme – which is specifically aimed at small businesses – by £500 million.
Chancellor Rachel Reeves said it is now ‘more important than ever to back our world-leading businesses and support them to navigate the challenges ahead’.
She added: ‘Today’s announcement will do that just, with thousands of businesses right across the country set to benefit.’
Since this time last week, the global trade picture forged by Donald Trump’s tariff policy has changed dramatically.
Where the UK’s 10% tariffs once looked relatively lenient, the country is now on an equal footing with much of the world after the US President sought to calm market jitters with a 90-day pause on most of his reciprocal tariffs.
However, Trump ramped up his targeting of China with a 145% tariff on all imports after Beijing retaliated by raising its own import tax on US products to 125%.
Another major concession was made by the US yesterday, though, when smartphone and computer imports were exempted from reciprocal tariffs – including those placed on China.
In an article for the Observer today, Reeves said the UK was facing a ‘new economic era’.
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She wrote: ‘I am in no doubt that the imposition of tariffs will have a profound impact on the global economy and the economy at home.
‘This change can be unsettling for families who are worried about the cost of living and businesses concerned about what it means for them.
‘But our task as a government is not to be knocked off course or to take rash action which risks undermining people’s security.’
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