The introduction of blanket US tariffs after weeks of speculation has sent shockwaves across global markets – and UK SMEs are right to be concerned. On 2 April 2025, President Donald Trump announced a 10% tariff on all imports from the UK, with some sectors, such as the automotive industry, facing rates as high as 25%. With the US being one of the UK’s largest export markets, the knock-on effects for small and medium-sized businesses could be significant.
Why This Matters for UK SMEs
According to the Federation of Small Businesses (FSB), 59% of UK SMEs that export list the US as a key market. With these new tariffs in place, many firms now face shrinking margins, potential order losses, and heightened uncertainty. For SMEs operating on tight cash flow or relying on transatlantic trade, even a 10% price increase can threaten profitability.
The Confederation of British Industry (CBI) labelled the move as “deeply troubling,” warning that retaliation or escalation could cause supply chain instability and further price volatility.
Which Sectors Are Most at Risk?
While the tariffs apply broadly, automotive, manufacturing, and food & drink exports appear particularly vulnerable. With a 25% tariff on vehicles and parts, the UK’s thriving automotive supply chain – especially SMEs that manufacture components – may see significant drops in US demand.
Similarly, food and drink exporters, already navigating post-Brexit red tape, now face further hurdles in pricing and compliance to remain competitive.
What Does The Future Hold?
The wider macroeconomic impact of these tariffs could present serious ripple effects for British SMEs. While the direct costs fall on US importers, reduced demand for UK goods could dent revenues and profitability.
Exchange rate volatility following the tariff announcement may also raise the cost of importing materials into the UK, further squeezing margins. According to Oxford Economics, higher import costs may drive inflation, prompting wage pressures and adding strain to business operations.
The Government’s Response – And What SMEs Can Do
Prime Minister Keir Starmer has advocated for a calm, diplomatic response rather than immediate retaliation. “Cool heads must prevail,” he said, urging a focus on long-term stability.
In the meantime, trade bodies are pushing for emergency support to help SMEs weather the storm. The FSB has called for direct aid, finance options, and targeted export support to help firms adapt.
Get Strategic Advice from Nordens
We know from experience that uncertainty in global trade requires more than reactive thinking – it calls for clear strategic planning. Here’s a few ways that SMEs can respond proactively:
- Review your exposure – Understand how much of your revenue or supply chain depends on US markets.
- Explore new territories – Diversify exports into tariff-free or emerging markets with trade agreements in place.
- Optimise operations – Identify cost savings, improve forecasting, and enhance pricing strategies to preserve margins.
- Get expert guidance – Strategic advice can help you assess risk, improve resilience, and adapt to change with confidence.
At Nordens, our Strategic Advisory team is working closely with SMEs to navigate these challenges. Whether it’s rethinking supply chains, modelling tariff impacts, or identifying growth opportunities elsewhere, we’re here to help you adapt and thrive.
Got questions about Strategic Advisory or need expert advice? At Nordens, we offer assistance with all of your business needs: from your everyday accounting to Advisory, Tax, Audit and more. If you need support with any of the above or just want to speak to a member of the team, get in touch today.
