Trump’s tariffs would cause higher prices and less choice on supermarket shelves, supply chain expert warns
Donald Trump’s plan to impose 10 per cent tariffs on the UK will leave Britons facing higher prices and less choice on supermarket shelves, a supply chain expert has warned.
Oisín Hanrahan, co-founder and managing director of Keychain, which works with major supermarkets to identify high costs in the supply chain, said: Independent He said the tariffs “will not be limited to trade statistics but will start appearing in weekly stores.”
It comes amid warnings that the export duty could wipe 0.1 per cent off Britain’s GDP (and could go as high as 0.3 per cent if the tariff is increased to 25 per cent, as Mr Trump has threatened); It’s a blow that could send Britain’s struggling economy into recession.
On Saturday, the US president said he would impose a 10 percent tariff on “any goods” shipped from Britain to the US starting February 1, rising to 25 percent from June 1 until an agreement is reached on Washington’s purchase of Greenland from Denmark.
Mr Trump said the same would apply to Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland, all NATO members.
Speaking about the US president’s latest threats, Mr Hanrahan said: Independent: “The 10 per cent US tariff on UK exports will not be limited to trade statistics, it will start appearing in weekly shops too.
“The US is one of Britain’s most important export markets and making it more expensive to serve this market has knock-on effects that ripple through food supply chains.
“For many British food manufacturers, exports are what keeps factories running at scale. When tariffs squeeze margins in the US, firms respond by reducing volumes, postponing investment or trying to recover costs elsewhere.”
He added: “Loss of scale and unit costs increase, increasing the risk of higher prices, fewer discounts and fewer choices on UK supermarket shelves, particularly in processed and branded foods where volume is paramount.”
Sir Keir Starmer has so far ruled out retaliation, saying a tariff war was “in nobody’s interest” and that he was “ensuring we don’t get to that stage”, although Germany and France are weighing in on hitting the US with retaliatory tariffs.
“What I want to do is avoid a tariff war, because businesses, workers and families across the country are going to be affected by a trade war,” the prime minister said at a press conference Monday morning.
But Mr Hanrahan warned that if Britain decided to retaliate “the impact on consumers would be more immediate”.
“Tariffs on US imports will increase the costs of products and inputs such as nuts, peanut butter, corn-based ingredients and food packaging materials, and these increases will be quickly reflected in prices through manufacturers and retailers,” he said.
Meanwhile, John Wyn-Evans, head of market analysis at asset management group Rathbones, warned that 10 per cent tariffs could shave 0.1 per cent off Britain’s fragile economic growth.
He stated that economic impacts should not be underestimated. “A 10 percent tariff could reduce GDP by around 0.1 percent for the most exposed economies, particularly the UK and Germany, while a 25 percent rate could impact output by 0.2-0.3 percent.”
“Ultimately, this event is reinforcing the shift from ever-increasing global integration to a world defined by sharper spheres of influence, a reality that businesses and investors must increasingly plan for and cope with,” he added.
Meanwhile, Paul Dales of Capital Economics predicted that the impact could be even worse than that, estimating that Britain’s GDP would shrink by 0.3 to 0.75 per cent if the new tariffs threatened by the US president were implemented in addition to the 10 per cent import duty on UK goods.
“While the UK economy is currently growing at 0.2-0.3 per cent per quarter, if this hit comes suddenly it could trigger a recession,” he said.
In a sign that the government is taking threats from the US seriously, Chancellor Rachel Reeves, who withdrew from an event at the London Stock Exchange on Monday morning, was among senior Cabinet ministers seated in the audience at the prime minister’s announcement.
Sir Keir also abandoned plans for a living expenses visit at the 11th hour on Monday to make the announcement; The prime minister promised to speak to the US president again about Greenland in the coming days after the two spoke by phone on Sunday night.
