Anxious, uncertain, and hesitant – that’s how businesses trading with the USA are feeling as they wait to find out how Donald Trump’s tariffs will affect them.
The USA was Liverpool city region’s biggest export partner in 2023, with local firms exporting more than £1bn in goods from more than 900 businesses. But the tariffs announced by President Trump this month have thrown the export market into chaos. In the short term businesses will face a 10% tariff on goods exported to the US, though automotive firms face 25% tariffs.
The tariff may not be as simple to calculate as 10% or 25%. Businesses will also have to pay tariffs on components from other countries that form part of their supply chain, potentially increasing the costs even more.
But worse even than the costs is the uncertainty over what might happen as the US administration appears to shift its position daily and as businesses fear retaliatory tariffs from elsewhere in the world. The US might also do deals with other nations or regions ahead of the Ƶ, potentially favouring competitors from those areas.
Liverpool Chamber asked dozens of member businesses in sectors including manufacturing, engineering and logistics what they thought the impact of the tariffs would be. Now it has shared some of those responses with BusinessLive, with head of international trade Elena Enciso saying “nervousness” was the main reaction as firms felt unable to plan ahead.
Delayed orders and diminishing trust
A manager at a Wirral machinery manufacturer – who asked the Chamber to stay anonymous – said: “The impact has certainly created a nervousness, I think for both us and our customers. No business makes the margin of profit to be able to approach the situation entirely without great caution.
“With rising energy costs, national insurance , wages and everything to do with our daily production, our margins are constantly having to be reconsidered, which also takes time. We are always careful with the contract terms to ensure clients pay any duty and tariffs.
“We have been in negotiation for a year with a New England based customer, and I visited them last October following their enquiry. I think the current situation will delay the order as they are a family owned company and could not afford an extra 10%. For larger companies, it is expected that as we have no competitors in the USA they will have to pay. The concern is that it takes five to six months before the order will arrive at a US port, and not having certainty over the tariff could make customers postpone.
“It is also unsettling that when you work within a global market there has to be trust. Trust that good equipment/products will be delivered on time and the right support during install and long into the future will be given. People working in export, whatever country you are from or selling to, build relationships based on trust and respect, but what is happening now is diminishing this and is very negative. If this continues, it will impact our business, and we will not invest in growth.”
Brainboxes: US customers could lose out
Brainboxes makes hi-tech industrial devices that help manufacturers operate more efficiently. The company says its mission “is to realise the 4th Industrial Revolution for all businesses regardless of size”, and is headquartered in Speke with another base in Florida.
Its sales director Stephen Greer said: “For some customers, we are the importer of record so we will have to wait and see if there is a significant hike in costs over the coming weeks. For our two major USA-based distributors, they are in free trade zones which means they defer tariff payments until they determine where our goods are shipped to.
“This means they will only pay tariffs on goods destined for USA customers - around 50% of their customers are global and will not be subject to the tariffs. In this respect, customers in the USA will actually lose out and potentially pay more than customers from other countries.”
Could US buying habits change?
A spokesperson for a major global logistics operator said: “We have a diverse cargo mix and our volumes have yet to be impacted significantly. Our strategy is to continue to monitor feedback from our shippers and keep an eye open for any potential losses to certain cargo types but also monitor potential opportunities the tariffs may bring.
“Long term buying habits of the US population may change if the increased tariffs are passed onto the retail price but it is too early to see that impact yet. Things can change very quickly - the volatility and extreme nature of the tariffs from certain areas could mean things change positively or negatively, which is not helpful in long term partnerships and contracts required for ongoing production lines.”
Global supply chain tariffs could raise costs
Clarke Energy is one of Merseyside’s biggest business success stories, supplying power generation equipment to plants around the world from its Knowsley base.
Alex Marshall, group business development and marketing director US, said: “Our business exports services to the Ƶ from the US within our business units. Components for our installations are typically supplied from Austria but may include China, for example in the instance of a battery energy storage system.
“If the USA’s tariffs are realised on either of these components, it will raise the price of our customers’ projects and will inevitably mean they will be forced to reconsider their investments accordingly.”
More price rises might be needed
Sanjay Aggarwal, chief spice officer at specialist food manufacturer Spice Kitchen, said: “While we have a really good USA listing, which is great, we are still unsure about what the impact of the new tariffs will ultimately be. Our customers may ask us to drop our prices or simply increase the recommended retail price charged to customers, or a mix of both approaches, so we await to see what happens.”
A manager at a sporting goods manufacturer said: “We have been forced to increase global pricing by 6% due to Ƶ increases in National Insurance Contributions and wage costs, as well as an increase in the costs of parts and materials from primarily Ƶ suppliers.
“Due to import tariffs, we have further increased USA pricing by 3%. Margins in the US have been reduced, hitting the retailer, and we have absorbed the remaining, but we will not be able to afford to do this in the long term, and more price rises will be required.”
‘Some orders have now been cancelled’
A manager at an unnamed freight forwarding business said the tariffs were worrying one of their largest customers.
They said: “We move shipments of furniture to the USA on behalf of one of our biggest clients. There could be a major effect with regards to them sending products, especially when the product originally attracted a zero rate of duty, and now it is 10%.
“The furniture can range from £200,000 to £300,000, so the duty amount is extremely high, as much as 20k to 30k, so it could price them out of the game and they are saying some orders have now been cancelled.”
Could Trump’s tariffs bring new opportunities for Ƶ firms?
The Chamber reports that not all businesses expect to be badly hit by the tariffs.
A Wirral-based chemicals manufacturer said: “We don’t export to the USA from the Ƶ. A few years ago, we transferred production from the USA to Mexico, where we already had a plant.
“Pending the final tariff decision, it now looks like we could end up manufacturing the USA-destined product here in the Wirral in the short term as tariffs on specific Mexican goods can reach 25%. So there won’t be a negative effect on our business right now, and maybe a short-term positive effect.”
International shipping and logistics operator Maersk, which has offices in Liverpool city centre, said: “The situation with the USA is evolving rapidly, making it difficult to predict the final outcome with certainty. However, based on the information shared so far, the Ƶ appears to be in a stronger position than others to continue participating in American sales—though not without some cost.
“Maersk has recently introduced a direct service from the Ƶ to North America—making us well-positioned to facilitate trade movements between the Ƶ and the USA. There are potential opportunities for cargoes previously sourced from other regions to be supplied from the Ƶ.”
What can the Government do to help?
Liverpool Chamber is tomorrow (24th) joining other chambers from across the country in a fully-booked webinar to support businesses exporting to the US.
Elena Enciso, head of international trade at Liverpool Chamber, has led the research into the impact of tariffs. She told BusinessLive: “I have spoken with a few businesses that are feeling really anxious and uncertain about pricing structures. And they are very hesitant to commit to long-term strategies with trade policies in the US changing so rapidly. “
Businesses will need, Elena said, to be extremely flexible in the months ahead. She said: “Apart from staying really well-informed and up to date with any change, they have to be very ready to adapt and be very agile at short notice to change their structure and export strategy.
“They can find out about free trade zones – they can try to avoid paying the whole tariff in one go and just pay them as and when their goods leave the trade zones. And they can try to negotiate the prices with the customers to absorb tariffs if that's a possible solution. but some businesses' margins are so small that this is not really an option.”
The Chamber is also asking the Government to support businesses with information, and even with financial support for firms that need to pivot or that suddenly face additional costs.
Elena said that could include “access to finance so companies can organise their shipments or absorb some of the costs additionally imposed by the USA”.
