Trade Wars 'Could Add £200m' To UK Cost Of Sourcing Goods From The US
Escalating trade wars could add as much as £200 million to UK companies' costs of sourcing products from the US, according to new research from Retail Economics.
The firm made the assessment following the introduction last week of retaliatory tariffs against UK action on steel and aluminium imports, which affect categories such as cranberries, bourbon whiskey and jeans.
This first wave of EU duties will cost UK retail £85 million, Retail Economics said.
"It will become critical to pay close attention to this dispute because it’s future course is unpredictable, fast moving and could quickly escalate to engulf other, seemingly unrelated areas of trade," said Richard Lim, chief executive, Retail Economics.
"This has come at a time when retailers margins are already under intense pressure from past rises in sourcing costs and escalating operating costs."
The duties are likely to be implemented in two phases, with the first tranche being triggered immediately. Additional duty rates for products in the first tranche are 25% and cover products as diverse as peanut butter, orange juice and ladders.
"The Trump administration has already condemned EU retaliation and has warned that it will retaliate in turn, sparking the possibility of a full blown tit-for-tat trade war," said Lim.
"Separately, President Trump has opened up new fronts on trade by imposing 25% duties on $50 billion of trade from China and opening an investigation into EU automotive sales in the US, concerned at the US automotive trade deficit with Germany in particular. If that investigation leads to new duties on EU auto exports we can expect to see even more 'retaliation' from the EU and consumer products are almost certain again to be in the firing line."
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.