A test for UK manufacturers

12 February, 2025

The potential for increased tariffs and a more protectionist stance in the U.S. is of particular concern. If major changes to trade policy materialise, UK exporters could face higher costs, supply chain disruptions, or the need to establish a local presence in the U.S. to bypass trade barriers. For businesses that rely on transatlantic trade, the unpredictability is frustrating, especially given the UK’s relative stability in other markets, including Europe.

However, it would be a mistake to see this as purely a problem. While some sectors will need to adjust, others may find new opportunities. If U.S. protectionism drives investment away, the UK could position itself as a stable and attractive alternative for businesses looking for a foothold in international markets. Similarly, with the right government support, British manufacturers could shift focus towards regions where trade relations remain more predictable, such as Asia or Commonwealth nations.

This is where Prime Minister Keir Starmer’s approach will be crucial. His government must work to ensure the UK is not caught off guard by sudden U.S. policy changes. Diplomatically, this means securing clear commitments on trade from Washington and reinforcing the UK’s position as a reliable partner. Domestically, it means creating the conditions for manufacturers to adapt - whether through financial incentives, investment in skills, or targeted trade agreements that help offset any losses in the U.S. market.

For UK manufacturers, the key is agility. Those who rely heavily on the U.S. should be reviewing their exposure and exploring contingency plans. Businesses with diverse export markets may find themselves in a stronger position, while those looking to expand must weigh the risks and rewards carefully. The lesson from past disruptions is that those who act early will be better placed to thrive.

Uncertainty in the U.S. is a challenge, but not necessarily a crisis for UK manufacturing. If handled correctly, the shifting trade environment may offer as many opportunities as risks - particularly for those who are prepared to adapt

Aaron Blutstein, Editor