Businesses in Wales has raised serious concerns over future trading prospects after the imposition a 10% tariff on all UK goods into America.
The US, outside of the EU, is the biggest export market for Welsh firms with total exported goods worth more than £2bn annually.
The 10% tariff on goods is lower than many other countries and the 20% applied to the EU. Separately the US has also implemented a 25% tariff on all automotive and steel and aluminium it imports from nations globally. To what extend Welsh exporters will be able to pass through the cost of tariffs in higher prices to US consumers, is unclear. There are also concerns that nations with higher tariffs will seek to redirect goods into other markets, such as the UK with an negative impact on the domestic sales of UK firms.
The value of UK goods exported to the US is more than £62bn a year (2023 figures), which equates to around 16% of total global exports. The biggest contributor are medicinal and pharma products at £8.5bn, followed by vehicles (£8.5bn), oil (£2.9bn), scientific instruments (£2.8bn), organic chemicals (£2.7bn), industrial machinery (£2.5bn), industrial machinery (£2.5bn), transport equipment (£2.4bn) and specialised manchinery £1.9bn).
Read More Related Articles US firm Vishay Intertechnology confirms £250m investment at UK’s biggest semiconductor facility Read More Related Articles Our Welsh export champions doing the business globallyAccording to Welsh Government analysis, the US is Wales’s highest value trading partner by country. In 2023 Welsh exports to the US were £2.9bn, with the value of US goods imported higher at £3.7bn. The biggest contributor was machinery and transport equipment, which accounted for 5.3% of Wales’s exports. Its biggest import was mineral fuels, lubricants and other materials, which accounted for 8.1% of Wales’s imports.
Some 40,000 people in the Wales work for US firms. Last week US tech firm Vishay Intertechnology announced a £250m investment at its Newport compound semiconductor facility as part of a planned £1bn phased investment over the few years which would create hundreds of high-skilled jobs,
David Peña, director of International Trade at Chambers Wales South East, South West and Mid, said: “Tariffs and other trade barriers have historically shown their inefficacy when it comes to fostering long-term economic growth and competitiveness of products and businesses.
“Increased levels of uncertainty paired with slow economic growth paint a grim picture for Welsh businesses, all while inflationary pressures are still present. The effect of increased global tariffs will be impacting all sectors: from exporters seeing their products becoming less competitive overseas, to importers seeing their supply chains impacted, to final consumers on all receiving ends.
“We expect our politicians to keep dialogue channels open and arrive to satisfactory agreements. Tariffs and trade barriers that are raised can also be taken down.
“Chambers Wales South East, South West and Mid stands ready to support businesses in Wales through market turbulences and will always work with partners and stakeholders to find alternative and innovative ways to keep trade flowing. We stand for trade, commerce and economic growth.”
Tina McKenzie, policy Chair of the Federation of Small Businesses, said: “The news of 10% tariffs on UK-US trade is a major blow to SMEs. Currently, 59% of small UK exporters sell into the US market.
“Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat. The fallout will stifle growth, hurt opportunities, and put a serious dent in the global economy. Now, we’ll need to look at the fine print to work out the precise implications for the UK’s small exporters.
“We support the push for an agreement between the UK and US governments that brings an end to tariff wars and puts SMEs at its centre by reducing non-tariff barriers.
“It’s already tough out there for small firms wanting to export. However, the opportunities it brings are endless – allowing them to tap into new markets and diversify their revenue streams. Those who do export are more likely to grow faster during tough economic times, too.
“The UK Government should now be ready to provide emergency assistance to any SMEs at risk of collapse. This will provide breathing space and support, protect people’s wages, and ensure that suppliers owed payments are paid – all helping to contain the fallout and allow firms a bridge as they adapt.”
John Hurst, FSB Wales chair said: “These tariffs pose an immediate challenge for Welsh small businesses exporting to the US, jeopardising their ability to compete in this important market. Given that the United States was the second-highest value market for Welsh products in 2024, accounting for £2.2bn, the potential damage is significant.
“The scale of this emerging challenge necessitates targeted support from the Welsh Government, including resource for Business Wales to expand their trade advisory services to provide guidance on navigating these new trade barriers and diversifying markets.
“We would also like to see Business Wales (Welsh Government business support brand) undertake proactive monitoring to gauge the impact of these tariffs on Welsh businesses, enabling swift and effective responses.
“A clear strategy is vital in order to give businesses confidence that they will be supported to continue exporting and helped to thrive in a competitive global market.”
Barret Kupelian, chief economist at PwC, said: “‘Liberation Day’ may sound like a celebration, but for global trade, it marks a turning point. It is a significant disruption to the international trading system. The UK avoided a direct blow—but the global economy has taken a substantial hit.
“For the UK, the impact is significant—though less severe than for some other countries. We export around £60bn in goods to the US, including pharmaceuticals, cars, and high-tech equipment. Not all sectors will be hit equally: car exports will face higher tariffs. And because many goods are sold as part of bundled packages, some UK services could also be caught in the crossfire.
“In the short term, businesses face a sharp rise in uncertainty. The one silver lining is that the retaliatory tariff rate applied to the UK is the lowest among affected countries.
“Our European trading partners will face steeper tariffs, though some of that economic pain will inevitably spill over to UK firms through supply chains and shared markets. Once the dust settles, we are likely to see renewed efforts to negotiate new trading terms with the US. But in the medium to long term, businesses can no longer rely on trade being predictable or stable. Strategic shifts -in sourcing, pricing and risk planning will follow.
“This is a significant pivot to power-based trade. The rules-based motorway is turning into a winding country road—resilience, not speed, will define success in this new terrain.”
