Exclusive: US tariffs set to impact multiple sectors including confectionery and machinery imports to America
pic: Adobestock
Confectionery businesses within the UK and Europe, alongside companies from the rest of the world be hit with fresh import taxes, as the US administration unveiled its minimum 10% tariffs on goods, writes Neill Barston.
The move, which has been dubbed as “Liberation Day” by the recently installed Republican government, has effectively sparked a global trade war, with stocks falling notably on Wall Street stock exchange, as the Dow Jones industrial average charting 30 major American businesses dropped by a reported figure of 1,100 points.
This amounted to a 2.7% drop upon news of the major economic measure that had been anticipated for some months, with the government arguing that it was a countermeasure for “being ripped off for decades” by other nations importing American goods and services. Canada and Mexico have already stated that they intend to raise targeted reciprocal tariff rates in light of the move.
The Financial Times has reported that the EU is preparing countermeasures to be brought in after the end of April, unless the US performs a U-turn on its announcement.
Consequently, financial analysts have warned the introduction of such tariffs in the US is likely to have a negative impact, with consumers ultimately paying more for a raft of goods in the US and elsewhere. This in turn places strain on the jobs market and consumers’ disposable income.
As far as the UK is concerned, it has fallen under the lowest tariff level of 10% tax, which will be applied to all goods – with confectionery, including chocolate ranges, set to be notably affected by the measure. Presently, the UK exports around £60 billion worth of products to the US, around £2 billion is reportedly within the food and agricultural sector.
The announcement of fresh import tariffs will also impact machinery manufacturers seeking to sell their lines in the US – which the American government asserts will drive companies to ramp-up production levels domestically and cut back on overseas importing.
According to government sources, the UK government had expressed concern tariffs may be levelled at a higher level of 20% – which is the case for EU, with some nations being charged even more, such as Switzerland, which will face rates of over 30%.
Among the worst hit will be China, which already had a 20% rate has been raised to a total of 54%, Vietnam 46%, South Africa 30%, Taiwan 32% and Japan 24%, with the US president confirming there would be a 25% import duty applied to all non US-made vehicles. As market specialists have confirmed, these rates are all considerably above the general tariff rates that are presently charged to the US from the respective national around the world.
In the UK, the Food and Drink Federation warned within the past two weeks that British manufacturers in the sector were already facing continued product cost inflation, which had caused considerable industry concern.
Commenting on the tariffs the organisation, said: “As the UK’s third biggest market for food and drink, we’re concerned to see an additional 10% tariff imposed on goods to the US. Whether chocolate or the iconic tea and biscuits, our members are predominantly exporting heritage British food and drink products that are well loved by American consumers. The majority of these are made by the 12,000 small and medium sized businesses in our sector, who will be disproportionately affected by these tariffs.
“We want to work with government as it develops its trade strategy to minimise the impact on our sector and help us continue to trade with all of our major markets, so that people around the world can continue to enjoy the food and drink that the UK is known for.”
Meanwhile, Balwinder Dhoot, Director of Industry Growth and Sustainability, FDF, commented on the recent hikes in trading costs through inflation upon the UK market that has caused concern across sectors over the past year.
He said: “As high levels of food and drink inflation continue, the pressure on businesses shows no sign of easing. Manufacturers are grappling with rising energy and commodities prices, alongside the impact of looming government policies, such as rising Employer’s National Insurance Contributions and the upcoming EPR packaging tax. In short, doing business in the UK is becoming increasingly expensive.”
