US president-elect Donald Trump’s tariff policies could deliver a 0.9% blow to the UK’s gross domestic product, according to the Centre for Economics and Business Research (CEBR).
CEBR’s estimate is based on Trump’s proposed policies of a 60% levy on Chinese imports and a 20% tariff on other imports.
These measures could heavily impact UK sectors like automotive, machinery, and pharmaceuticals, warned analysts.
These industries rely significantly on exports to the US and could face heightened trade barriers under the proposed policies.
A scenario analysis from the National Institute of Economic and Social Research (NIESR) supports these concerns, estimating that 10% tariffs could decrease UK economic growth by 0.7 percentage points.
The UK could mitigate this by pursuing a UK-US Free Trade Agreement, suggested CEBR.
When former trade secretary Liz Truss attempted to kickstart FTA negotiations in March 2020, she suggested that the UK economy would benefit from a £3.4 billion boost under the right terms.