The potential inflation and supply chain delays caused by Donald Trump-imposed tariffs on the UK could impact the average person, business experts have told the Standard.
The US president has slapped a 25 per cent steel and aluminium tariff on Britain, despite Sir Keir Starmer having attempted to change Trump’s mind on a trip to the White House.
Now the prime minister has said that “all options are on the table” to potentially retaliate after the tariffs came into effect at 4am on Wednesday.
Trump’s actions could put jobs at risk in the beleaguered British steel industry although, as of Thursday, Sir Keir has so far resisted calls to strike back.
During Prime Minister's Questions, Sir Keir said: "I'm disappointed to see global tariffs in relation to steel and aluminium. We will take a pragmatic approach."
Business experts have now told the Standard that as well as the metal industries, the average British consumer could also be feeling the effects of Trump’s measures.
“Trump’s tariffs are forcing manufacturers to rethink their strategies at speed as they navigate rising costs,” said Simon Geale, employee value proposition, at supply chain consultants Proxima. Setting up new facilities and supply chains takes time, turning this into a race against inflation. Manufacturers will have to decide whether to absorb these additional costs or pass them on to consumers.
“Many will explore alternative suppliers, ramp up local production, and strengthen ties with domestic partners. However, despite best efforts, UK consumers are likely to feel the impact - particularly on goods like electronics and cars - at least in the short term.”
Read more: Keir Starmer vows 'all options on the table' in retaliation to Donald Trump's steel tariffs
Mr Geale added: “If US tariffs disrupt global trade flows, the UK could also face supply chain delays, leading to product shortages and higher prices for the consumer.
“On the upside, if companies shift production away from tariff-heavy regions, the UK might benefit from firms relocating to Europe. But for now, consumers are more likely to experience price hikes and economic uncertainty before any potential gains materialise.”
Business secretary Jonathan Reynolds has described Trump's plans as "disappointing" and his sentiment was echoed by Alex Kershaw, steel and raw materials senior analyst at price reporting agency Fastmarkets.
Mr Kershaw told the Standard: “The implications of broader US-imposed trade tariffs, along with potential retaliatory measures from affected countries, are contributing to economic uncertainty around the world, with import tariffs being broadly inflationary. This will hinder efforts by Europe and the UK to recover from high inflation and related economic struggles seen in recent years.
“As a result, the outlook for economic activity and job creation in export-driven manufacturing sectors in Europe and the UK is less positive than expectations prior to president Trump’s inauguration. Moreover, we may see inflation rates remain higher for longer, impacting the average person.”
However, on the steel and aluminium side, Mr Kershaw believes that the tariffs will have a “limited effect on the UK” with Canadian and Mexican metals being more affected.
Julien Lafargue, chief market strategist at Barclays Private, said: “The impact of US tariffs could be wide-ranging. One of the main concerns is what it means for inflation. When global trade is constrained and doesn’t flow as efficiently as it could, this often translates into higher prices.
“In turn, sticky inflation could lead central banks to maintain higher interest rates for longer. This may be a positive for savers, but could lead to some repricing of certain assets such as stocks and real estate.”
