In current days, former President Trump has threatened to impose a 100 % tariff on Chinese language imports – the newest in a collection of many excessive tariffs launched throughout his second time period, however this one particularly appears to be a reasonably dramatic escalation within the ongoing commerce battle between the 2 nations.
Whether or not it really occurs or not is, after all, one other story, as Trump can be identified for making threats. Nevertheless, the reality is that as of late, usually the mere announcement sends ripples throughout world markets and provides recent uncertainty for UK companies that commerce with or depend on provide chains tied to China.
This may be simply the newest in a collection of tariff strikes from the Trump administration aiming to reset commerce balances and leverage political stress. However, now, UK companies should ask, what does this risk actually imply? That’s, what does it imply on paper, within the streets and close to political technique? And, how ought to they start getting ready, even earlier than the tariff ink dries?
Tariff Redux: The Newest in Trump’s Protectionist Playbook
This new 100 % tariff isn’t rising in a vacuum. Earlier in 2025, Trump already initiated sweeping reciprocal tariffs and raised levies on Chinese language items beneath the guise, it appeared, of nationwide safety and deficit discount.
Chinese language retaliatory responses adopted, and markets have grown risky because of this. The escalation to a full doubling of duties would characterize one of many sharpest turns but within the U.S.-China commerce standoff. As such, consultants are break up on whether or not such a dramatic transfer is politically viable or whether or not it serves extra as a bargaining chip than a binding dedication.
However as irritating this transfer is (particularly if the Turmp administration by no means actually even plans on implementing it), the risk alone exerts stress. Importers, retailers and producers could speed up shipments, reprice items or reroute provide chains in anticipation. That form of anticipatory behaviour can distort markets, drawback smaller gamers and provides rise to chaos in cross-border commerce flows.
So, is Trump the President who cried “tariff”? Or, is that this an actual risk? And, both manner, what does the risk and the potential implementation imply for UK companies?
What the Risk Means for the U.S. and American Enterprise
After all, as has develop into very clear, particularly in recent times, tariffs imposed within the US are inclined to have ripple results all around the remainder of the world, with companies in locations just like the UK, Europe and even additional afield struggling or being affected not directly in a method or one other.
For UK companies, the instant impression of a 100 % tariff between the US and China could seem oblique, however the reality is, the ripple results could possibly be profound. The UK sits in the midst of world provide chains that feed each American and Asian markets, and any disruption to commerce between the world’s two largest economies inevitably spills over.
Many British corporations depend on Chinese language manufacturing for elements, packaging and shopper items that finally discover their manner into the US retal market. If these items are all of a sudden topic to heavy tariffs, UK exporters and logistics companies might face delays, value surges and contract renegotiations. Retailers that import completed items from China might also really feel stress to extend costs or search different suppliers – a expensive and time-consuming course of.
Past provide chains, there’s a broader threat to investor confidence and forex stability. A renewed commerce struggle between Washington and Beijing might dampen world progress, tighten capital flows and result in market volatility that impacts British exports, particularly in sectors corresponding to automotive, electronics and shopper tech.
Even when the tariff by no means materialises, the risk alone forces UK companies to plan for uncertainty – one thing few can afford after years of Brexit-related changes, inflation and shifting commerce insurance policies.
Our Specialists
- Jonathan Steenberg: Lead Economist for the UK, Coface
- Sarah Fleming: Spokesperson for NerdWallet UK
- Matthew Ware: CEO of Mark 3 Worldwide
- Equipment Conklin: Senior Vice President, Danger and Compliance at Exiger
Jonathan Steenberg, Lead Economist for the UK, Coface
“It’s not inconceivable that the U.S. administration will proceed with the tariffs, notably on condition that the present association is merely a truce, set to run out on 10 November. In idea, this could see tariffs revert to the +100% price. Nevertheless, each events are prone to favour reaching an settlement that avoids the imposition of export controls and maintains tariffs at their current ranges. As such, an additional extension – following some political posturing – seems to be essentially the most possible final result.
“At current, the scenario introduces appreciable uncertainty round provide chains and the flexibility of some companies to fulfil deliveries. Firms could also be affected both instantly by export controls or not directly – for example, if a provider requires vital minerals to supply items for them. An escalation in tariffs between the US and China would place further pressure on provide chains. Initially, this might set off a surge in demand as a result of frontloading, seemingly pushing up transport charges. Over time, it might additionally immediate Chinese language companies to pivot in the direction of different markets such because the UK, intensifying competitors in an already difficult atmosphere.
“The impression on startups will fluctuate considerably relying on the area and sector. For these based mostly within the US and China, the consequences are prone to be notably pronounced. US startups could face greater prices when importing items or elements, whereas Chinese language startups might encounter larger problem in exporting. Export controls would additionally complicate manufacturing throughout a number of industries – from photo voltaic panels to electronics – by proscribing entry to important inputs. For startups in different sectors, the impression might go both manner. Prices could ease if exports are redirected, however might rise if key suppliers are affected. A broader commerce struggle would harm each economies, slowing world progress – a growth that will inevitably have an effect on all nations. Startups, particularly, could be weak, as entry to credit score would seemingly tighten, disproportionately affecting startups and SMEs.”
Sarah Fleming, Spokesperson for NerdWallet UK
Do we predict [Trump] will go forward with the 100% tariff on China?
“Historical past tells us this can be a textbook maximum-pressure negotiation tactic – announce the largest, most stunning quantity attainable to realize leverage. Economically, a full 100% further tariff on all Chinese language imports would successfully halt commerce, which is tough to maintain. Companies needs to be getting ready for a major, expensive disruption, even when the ultimate tariff determine is somewhat decrease or is focused to particular strategic items. Uncertainty is the brand new threat issue.
What would it not imply for the UK?
“The UK gained’t be insulated from the fallout. The fee shock will hit world provide chains, which means UK customers will face greater costs for electronics, furnishings, and any product utilizing Chinese language elements, including recent inflationary stress. While worrying, the larger drawback is commerce diversion. If Chinese language items can’t be offered within the US, they get flooded into different markets just like the UK and Europe. That large influx of low-cost imports can devastate UK manufacturing, as we’ve already seen in sectors like metal. As tensions flare, this provides additional volatility to UK markets and heightens uncertainty for buyers and companies alike.
What would it not imply globally for startups?
“Startups are essentially the most fragile hyperlinks. These producing items within the UK or EU will inevitably face elevated competitors from Chinese language manufactured merchandise diverted from the US – negatively impacting margins throughout world financial traces. In consequence, this can pressure some early-stage UK corporations right into a expensive and time-consuming pivot to maneuver manufacturing to locations like India or Vietnam – which means all progress and new product plans are shelved. The co-threat of export controls on vital software program additionally means tech startups globally will seemingly see greater costs and potential shortage for superior AI chips and elements. It’s a significant stopper on innovation.”
Sarah’s ideas for UK companies navigating the continued uncertainty of Trump’s tariffs
“”Construct resilience into your plans, not roadblocks
“As an alternative of placing your startup ambitions on maintain, concentrate on embedding resilience into your enterprise mannequin.
“In case you’re simply beginning out as a enterprise proprietor or have progress targets for 2026, don’t put your progress plans on maintain if a small enterprise mortgage might nonetheless provide you with and your enterprise the monetary confidence to develop.
“Adaptability is what’s going to see you thru unsure buying and selling situations.”
“Strengthen your funding pitch with situation planning
“In case you’re planning to strategy buyers, situation planning can add credibility to your enterprise proposal. Demonstrating that you just’ve mapped how your enterprise might keep viable beneath totally different geopolitical and financial outcomes reassures backers of your preparedness.
“If monetary modelling isn’t your energy, regional enterprise help hubs may also help founders refine projections and strengthen funding functions.”
Defending your tech enterprise from broader disruption
“Commerce tensions and tariff uncertainty aren’t the one dangers companies face proper now. From excessive climate to provide chain disruption, occasions past your management can have a severe impression in your backside line. Enterprise interruption insurance coverage can act as an important security web in the event you’re compelled to pause buying and selling as a result of a fireplace, flood or different unexpected occasion.
“In occasions of world instability, being proactive about threat administration could make the distinction between non permanent disruption and long-term restoration.”
Matthew Ware, CEO of Mark 3 Worldwide
Will Trump Go Forward with the 100% Tariffs On China?
“Sure, however it’s prone to change sooner or later – it is because it’s a defensive measure after the Chinese language authorities imposed controls on uncommon earth exports. Strategically that’s in response to the controls imposed by the US on excessive powered chips.
“Each superpowers are flexing their respective muscle tissues on key elements of the availability chain that they management – it’s unlikely to be a straightforward resolution within the brief time period given the strategic worth of each objects being managed on each side – and the simmering prospect of confrontation over Taiwan and different pursuits over the following decade or two. The geopolitics are messy. Anticipate motion although.
What Would a 100% Tariff On China Imply for the UK?
“The UK depends on China (as does many of the world) for its uncommon earths – so it’s going to problem some sectors considerably. The rise in Chinese language tariffs we’ve seen has led to larger exports from China into Europe and different elements of the world at decrease costs. It might have a short-term profit for some costs within the UK, and it might additionally improve the attractiveness of UK and European merchandise within the US market – which is at present adapting to the publish de minimis world.
What Would the Tariff Imply for the Remainder of the World?
“It’s only a continuation of the event over this yr of complexity and problem in world commerce. The final two or three many years had been about growing simplicity in cross border commerce – and that’s now being reversed – so working throughout borders with bodily items goes to be extra advanced, extra expensive and difficult. It creates alternative for brand spanking new entrants and dynamic gamers who may be nimble and reply to the fact – and dangers for some. We stay in fascinating occasions. “
Equipment Conklin, Senior Vice President, Danger and Compliance at Exiger
“For UK companies, particularly these in superior manufacturing, protection, and tech, new U.S. tariffs might create each disruption and alternative. International provide chains are deeply interconnected — if the price of sourcing from China rises, UK companies might see ripple results in pricing and availability of elements. However there’s additionally a possible upside: U.S. and UK corporations could discover new causes to collaborate on nearshoring, innovation, and trusted-partner provide networks.
“Tariffs might really open the door for startups. If tariffs make Chinese language items much less aggressive, there’s a chance for startups within the UK to fill that hole with modern applied sciences, merchandise, and supplies. Startups that may transfer shortly to localize manufacturing or type new partnerships can be properly positioned to seize market share — particularly as demand grows for trusted, clear, and diversified provide chains. It’s a second that would strengthen U.S.–UK collaboration throughout the tech, protection, and manufacturing sectors.”
