UK trade with US falls apart after Trump tariff blitz
Exports to the US – the country the UK trades with the most with – saw its largest monthly decrease in April since records began, official data has shown.
The onset of President Trump’s trade war with some of his closest allies and foes put governments on standby as major forecasters warned the world economy would suffer from painful tariffs on goods.
Fresh data published by the Office for National Statistics showed the UK was not immune to turmoil as exports of goods to the US fell by £2bn after four months of steady increases.
ONS researchers admitted the drop was “likely linked to the implementation of tariffs on goods” by the US.
Figures also revealed the total trade deficit grew to £11.5bn in the three months to April due to a larger rise in imports than exports, suggesting Trump’s protectionist policies were taking a toll on British firms.
The ONS said there were decreases in exports of most commodities to the US but researchers suggested that monthly data “can be erratic” and should be taken with a pinch of salt.
In separate data released on Thursday morning, it was revealed that the UK economy shrank by 0.3 per cent in April in a further indication that global tensions are hitting output levels.
The UK also saw the value of its goods exports drop by nearly nine per cent in April due to falls in sales to both EU and non-EU countries.
Exports to the EU fell by more than four per cent compared to the month before while those to non-EU countries dropped by 12.6 per cent.
The Labour government will be hoping that April trade results are a one-off after it struck deals with the US, India and the EU over the last two months.
Trade deal hopes
Its deal with the US saw tariffs on steel and cars fall according to certain quotas but it has not yet been signed off.
President Trump spared the UK from aggressive 50 per cent tariffs on steel but a baseline tariff of ten per cent on all goods could still come into effect in a matter of weeks.
The UK government also said a trade deal with the EU on food standards will inject nearly £9bn into the UK economy by 2040, with the agreement running against mounting global trade tensions.
But the UK stands to suffer from a weakened world economy as the World Bank says global growth would fall to its slowest pace since the 2008 financial crisis.