The US trade war is back — and Britain’s smallest firms are in the firing line

The Supreme Court said no to the way Trump’s tariffs were implemented when he became President but there’s ways around that ruling and so 15% tariffs are being reinstated. What if any, impact will that have on your business?

Even though the tariffs are aimed at imports into the United States and push up the prices of those to US consumers, the ripple effects hit UK small businesses in several ways. The impact depends on whether a business imports goods, exports to the US, or relies on global supply chains. A minority of niche exporters may benefit, but for most UK businesses, the tariffs create more risk than opportunity.

Photo by Jakub Żerdzicki on Unsplash

1. Higher costs for UK importers even if they don’t trade with the US

Trump’s tariffs raise global demand for non‑US goods and shift supply chains. That means:

• Global suppliers raise prices to offset lost access to the US market

• Competition for non‑US supply increases, pushing up costs

• Shipping and logistics become more expensive as supply chains reroute

For UK micro businesses that import:

• Raw materials

• Components

• Electronics

• Textiles

• Machinery

• Packaging

prices may rise, even if they never sell a single item to the US.

Small firms are hit hardest because they:

• Buy in small volumes

• Have limited negotiating power

• Can’t hedge currency or stockpile.

2. UK exporters to the US face reduced competitiveness

If the US imposes tariffs on certain categories of goods, UK exporters may find:

• Their products become more expensive in the US market

• US buyers switch to domestic or tariff‑free alternatives

• Orders slow down or become more volatile.

This affects:

• Food & drink producers

• Niche manufacturers

• Beauty and wellness brands

• Fashion and textiles

• Automotive and machinery suppliers/

Micro exporters who often rely on a single distributor or marketplace are especially vulnerable.

3. Supply chain disruption hits small firms first

Tariffs trigger global supply chain reshuffling. For UK small businesses this means:

• Longer lead times

• More stock level disruption

• Higher minimum order quantities

• Greater uncertainty in delivery schedules.

Small businesses don’t have the stock in warehouses or cash reserves to absorb these shocks.

4. Currency volatility increases costs

Tariff announcements often strengthen the US dollar. A stronger dollar means:

• UK businesses pay more for dollar‑denominated imports

• UK exporters become more expensive in the US.

Micro businesses feel this immediately because they buy in small batches and can’t hedge currency exposure.

5. Rising inflationary pressure on UK business inputs

Even if UK consumer inflation is falling, business input inflation can rise because:

• Global commodity prices increase

• Shipping and freight costs rise

• Manufacturers pass on higher costs

• Insurance and financing costs increase.

This widens the gap between the Consumer Price Index and “real” small‑business inflation.

6. Increased competition from US firms in non‑tariff markets

If US exporters lose competitiveness in tariff‑affected markets, they may:

• Pivot to sell more into Europe

• Discount heavily

• Flood UK/EU markets with surplus stock.

If that brings prices for consumers down, it can squeeze UK small manufacturers and retailers.

7. Opportunities exist, but mainly for niche UK producers

Some UK businesses may benefit if:

• US tariffs make Chinese or EU goods more expensive

• US buyers look for alternative suppliers (possibly here in the UK)

• UK firms can offer specialised, high‑value products.

These opportunities mainly help:

• Advanced manufacturers

• High‑end food & drink

• Luxury goods

• Specialist engineering

Micro businesses with limited export capacity may struggle to take advantage.

Some UK businesses are exposed:

High exposure

• Import‑reliant retailers

• E‑commerce brands using US platforms

• Small manufacturers using imported components

• Fashion, textiles, and homewares

• Electronics and machinery importers

• Those in the Automotive supply chain

Moderate exposure

• Food & drink exporters

• Beauty and wellness brands

• Floristry and giftware importers

Lower exposure

• Local services (salons, trades, care providers)

• UK‑only micro businesses with no import reliance

What UK small businesses can do:

• Review supply chains for tariff‑exposed countries

• Ask suppliers whether they expect price rises

• Increase stock levels where cashflow and space allow

• Diversify suppliers to reduce reliance on tariff‑affected markets

• Review pricing strategy to protect margins

• Monitor currency movements

• Explore export support if opportunities arise.

Bottom Line

Trump’s new tariffs don’t just affect the US; they reshape global trade. For UK small and micro businesses, the impact is likely to be:

• Higher import costs

• More supply chain disruption

• Reduced competitiveness in the US market

• Greater inflationary pressure on business inputs

• Increased uncertainty in planning and pricing