New US trade tariffs threaten UK and EU industries

The US government’s latest trade measures could disrupt industries across the UK and Europe, as new tariffs on key exports loom.

The proposed 25% levy on cars, pharmaceuticals, and semiconductors is set to drive up costs and reshape global supply chains. Businesses now face difficult decisions on production, pricing, and market strategies in response to these policy changes.

On 18 February, Donald Trump confirmed the introduction of these tariffs, with further details expected on 2 April. The move follows a review of international trade practices, with the US aiming to penalise countries that impose higher import duties on American goods.

Analysts predict that retaliatory measures from the EU are likely, further intensifying trade tensions.

A 25% tariff on car imports will have significant consequences for UK and EU manufacturers, especially as European firms currently impose a 10% duty on American vehicles, compared to the US’s existing 2.5% rate.

Carmakers which rely heavily on the US market, could be among the worst affected. To counteract the rising costs, some companies may consider relocating production to the US, though supply chain complexities could make this shift challenging.

The pharmaceutical industry also faces serious risks. Ireland, the largest supplier of pharmaceuticals to the US, could see significant disruptions, with exports currently valued at nearly €100bn. Indian pharmaceutical companies have already experienced a drop in stock values following the tariff announcement. European pharmaceutical firms may struggle with increased costs, potentially affecting healthcare pricing and investment in new treatments.

The European Commission has signalled that countermeasures may follow if the tariffs proceed. Sectors such as steel and aluminium are already under pressure, with UK steel producers fearing increased costs for niche products vital to US defence manufacturing.

Additionally, online retailers could see changes to import duty rules, which may affect UK businesses that sell lower-value goods to American customers.

With further tariff increases expected over the coming months, UK and EU businesses must prepare for ongoing trade uncertainty. Companies will need to reassess supply chains, review pricing strategies, and anticipate potential disruptions. As these policies unfold, the long-term impact on global trade dynamics could be profound, reshaping industries and economic relationships worldwide.

Stay ahead of shifting trade policies with PSP Worldwide Logistics. Our expertise in customs and supply chain solutions helps you navigate new tariffs, ensure compliance, and adapt sourcing strategies. Keep your business resilient – EMAIL Colin Redman today.