British exports to the US have plummeted to their lowest level in three years in the wake of Donald Trump’s swingeing tariffs.
The 13.5 per cent fall comes despite a much-lauded US-UK trade agreement, designed to protect businesses from the worst of the added costs.
Ministers are now facing calls to secure part of the deal that is still outstanding, on steel and aluminium, which still have a 25 per cent levy imposed on exports to the US.
The wider tariffs have seen an extra 10 per cent slapped on goods from most UK sectors, ranging from food and drink to chemicals, the British Chambers of Commerce (BCC) said.
Comparing the goods exported in the three months to June with the same quarter a year ago, the BCC said sales were £2bn lower, a drop of 13.5 per cent year-on-year.
The group said that exports of road vehicles had fallen by a whopping 29 per cent, while chemicals exports fell by 24 per cent.
The findings come as new official figures also show that the uncertainty caused by the tariffs, as well as other factors such as tax increases, mean that overall UK economic growth slowed in the second quarter of this year.
The Office for National Statistics (ONS) said gross domestic product (GDP) grew by 0.3 per cent for the quarter, after 0.7 per cent growth in the first three months of the year.
However, the figure was stronger than the 0.1 per cent level widely expected by economists.
William Bain, head of trade policy at the BCC, said the effects of tariffs were “clearly being felt by companies exporting to the US”.
“This was the first full quarter of the ‘reciprocal’ US tariffs, which add an extra 10 per cent to most UK sectors, from food and drink to chemicals. The effect of these higher costs is becoming clear, with the lowest levels of goods exports to the US for 3 years.
“Implementation of the UK’s trade deal with the US in full is now needed to improve prospects, particularly for steel and aluminium goods,” he said.
“The agreement should be a platform to discuss further tariff reform with the US, especially in goods sectors where there is little competition on production.
He also called on ministers to focus on implementing those areas of the Trade Strategy which can boost goods export sales and growth at pace, while sustaining the rate of progress in services trade.”
President Trump and the PM finally signed off on a US-UK agreement to slash trade barriers on goods when they met at the G7 in Canada in June.
But the deal failed to include carve-outs for the steel industry, which still faces levies of a whopping 25 per cent on goods entering the US.
Industry experts and unions have called for these to be scrapped as soon as possible, amid warnings they are a threat to jobs and livelihoods.
But there are fears negotiations could drag on into the autumn after the transport secretary said work to get tariffs removed would continue over “days, weeks and months”.
In April, parliament gave the government emergency powers to take control of British Steel and continue production after Chinese owners, Jingye, proposed shutting the Scunthorpe site’s two blast furnaces and other key steelmaking operations. But its future is still uncertain.
The Treasury had been approached for comment.
