Britain’s manufacturing weakness may be a source of strength in avoiding Trump’s tariff war 25 April 2025 The UK is one of very few countries that has a broad trade balance with the US on goods, which may help to shelter it from President Trump’s reciprocal tariffs, while its growing trade in services shows where future growth may lie, the Resolution Foundation said today (Friday) in response to new ONS data on US-UK trade. The ONS data shows that the UK has a goods trade balance with the US – importing £57.1 billion of goods last year and exporting £59.3 billion of goods. However, the US is our single largest market for cars with a fifth of all UK car production ending up in the US, once supply chains are included. This highlights why the Government should prioritise negotiations for the automotive sector against the threat of higher tariffs. These higher tariffs are a worry for all UK manufacturing jobs, says the Foundation, which predominantly pay above-average wages and are concentrated in areas outside of London. The US-UK market in services trade is far bigger – the UK imported £61.2 billion of services and exported £137 billion last year. In current prices, our services exports to the US have more than doubled (by 118 per cent) since 2016. The UK’s biggest single export to the US, other business services, has almost trebled over this period, growing by 178 per cent. Emily Fry, Senior Economist at the Resolution Foundation, said: “The UK’s goods trade has faced repeated headwinds in recent years, accelerated by Brexit. But this manufacturing weakness may be a source of strength if Britain’s goods trade balance with the US keeps us out of President Trump’s global tariff war. “With the US our single largest market for car exports, the Government is right to prioritise protecting car manufacturing from US tariffs. “As a small, open economy the UK should avoid protectionism, and try to keep services out of any tariff discussions. The UK’s services exports hold the key to its future growth prospects with the US, the EU and the rest of the world.”
