It’s only a week since Rachel Reeves unveiled her Spring Statement.
But her plan to balance the nation’s books could be blown out of the water as Donald Trump prepares to unleash sweeping tariffs later today that could trigger an all-out trade war.
Having failed to secure a special carve-out for the UK, ministers are braced for a new wave of taxes on goods entering the United States, which is Britain’s biggest single export partner.
If the US President slaps a 25 per cent tax on all goods imported into the US, experts fear transatlantic trade would sink.
In this worst-case scenario UK exports would plunge by almost half and imports from the US slump by two-thirds, knocking economic growth for six.
Against this dire backdrop, we look at some of the British companies who are exposed to Trump’s tariff tsunami.
If the US President slaps a 25 per cent tax on all goods imported into the US, experts fear transatlantic trade would sink
Jaguar Land Rover
One in eight cars built in the UK is exported to the US, worth £6.4billion in 2023, leaving the sector especially exposed to Trump’s tariffs.
Trump wants carmakers to move production to the US to swerve tariffs but research from GlobalData shows that Jaguar and Land Rover owner JLR makes no cars in America, making it the most at risk of any car brand from a transatlantic trade war.
Some 25,000 UK jobs exist at places like JLR in the West Midlands and the BMW’s Mini factory in Oxford, according to the Institute for policy Research think-tank.
Most of the UK-made vehicles that go to the US are luxury cars, including Aston Martin and Volkswagen-owned Bentley.
Others are high-end vehicles such as McLaren supercars, selling just over 2,100 annually, some costing upwards of £250,000.
That makes them vulnerable to tariffs, though they will hope to pass the cost to their wealthy customers without denting their sales.
The US is a key market for Midlands-based car maker JLR, which is owned by India’s Tata Group and has factories in Coventry, Solihull and Wolverhampton.
Just over 26,000 Mini brand vehicles were sold in the US in 2024, according to BMW’s North American operations, although this was 21 per cent lower than the 33,500 cars it sold there in 2023. All Minis are made at its Cowley factory near Oxford.
The US is also a key market for Aston Martin, which makes cars at Gaydon in Warwickshire. The loss-making manufacturer generated around a third of its £1.6billion revenue for 2024 in the US, selling 6,030 cars – a drop of 9 per cent on the prior year.
One in eight cars built in the UK is exported to the US, leaving the sector especially exposed to Trump’s tariffs
AstraZeneca and GSK
The UK’s two largest drug makers, Cambridge-based AstraZeneca and London-headquartered GSK, are among the jewels in the British economy with a combined value of £237billion.
Both companies rely heavily on the US for sales, with AstraZeneca raking in £18billion from American customers last year, around 43 per cent of its total sales. GSK, meanwhile, received £16.4billion, more than half of its sales for 2024.
The US is the main destination for pharma exports from the UK.
Around £8.8billion worth of medicinal and pharmaceutical products were shipped to America in 2023, according to data from the Office for National Statistics (ONS).
This is around the same value as goods exported by the British car industry to the US.
Overall, the UK’s pharma sector employs over 73,000 people, meaning a slump in demand from the US could jeopardise a key British industry.
The industry also relies on a complex web of supply chains that source ingredients for its drugs from all over the world, including the US, which could be upended by tariffs.
US pharma giants with operations in the UK could also be disrupted by fresh tariffs, potentially putting more British jobs at risk.
Johnnie Walker whisky
Diageo, the owner of brands such as Johnnie Walker whisky, is bracing itself for a hard hit from Trump’s tariffs measures, which are expected to include levies on scotch.
Americans have long loved quintessentially British whisky brands, with the UK exporting around £1billion worth of scotch to the US every year.
There are fears among distillers that the sector will see a repeat of a previous 25 per cent US tariff on scotch that was imposed under the previous Trump administration in 2019 which cost the industry over £600million in sales before it was repealed in 2021.
It is a particularly worrying time for Diageo’s 4,500 UK employees including staff at its 29 distilleries in Scotland.
Overall, the UK’s scotch industry employs 41,000 people in Scotland and 25,000 elsewhere in Britain.
Diageo is also at risk from Trump’s levies against Canada and Mexico. The drinks giant owns Canadian whiskey brand Crown Royal as well as Mexican tequila sellers including Don Julio and George Clooney’s Casamigos.
In February, Diageo boss Debra Crew warned that tariffs on Canada and Mexico could wipe £161million from the group’s profits, a number that could grow if similar levies are applied to the UK.
Rolls-Royce
Jet engine maker Rolls-Royce forms a key chunk of the UK’s aerospace industry, one of the largest in the world.
The company relies heavily on the US as a source of demand for its engines, exporting around a quarter of its new models to America last year.
As a result, there are fears levies on UK aerospace exports could damage the company’s business, which currently employs around 22,000 people in Britain.
Last month reports emerged that Rolls-Royce was drawing up emergency plans to shift production to its factories in the US and expand operations in North America to avoid any new tariffs imposed by Trump.
Rolls-Royce raked in around £5.5billion from the US last year, around a third of its total sales for 2024 and more than double the £2.6billion of revenue it made from the UK.
It is a key supplier to the US Department of Defense as well as major aerospace manufacturers such as Lockheed Martin and Boeing.
The company previously warned investors that ‘rising protectionism’ from Trump could lead to higher costs and ‘realign’ global supply chains.
Alongside Rolls-Royce, fresh tariffs threaten to deal a heavy blow to the UK’s wider aircraft sector, which made £2billion from US exports in 2023.
Rolls-Royce relies heavily on the US as a source of demand for its engines, exporting around a quarter of its new models to America last year
BAE Systems
UK defence giant BAE Systems makes a large chunk of its money in the US.
Sales to America were worth £12.5billion last year, nearly half of the £28billion the company made in 2024.
As a result, a blanket levy on goods entering the US is likely to weigh heavily on the firm’s profit margins.
One potential upside is renewed demand for defence spending in the UK and Europe, which has seen the value of arms makers on the continent surge as countries look to beef up their armed forces and reduce reliance on the US.
This has been helped by recent commitments from Prime Minister Keir Starmer and Chancellor Rachel Reeves to boost British defence spending to 2.6 per cent of national income by 2027 from its current level of 2.3 per cent with plans to lift it to 3 per cent after 2029.
ADS, the UK aerospace and defence trade association, previously warned that tariffs would put businesses at risk as new levies will drive up the costs of assembly equipment and materials that are imported by the US.
British Steel
The UK’s struggling steel sector is already feeling the heat from Trump after the US president last month slapped a 25 per cent tariff on steel and aluminium imports from Britain.
The bosses of British Steel and Tata Steel, the two major players in the industry, previously warned MPs that the levies were driving away business.
There are also concerns that cheap steel could flood the UK market from abroad as overseas producers such as China look for new customers outside the US.
British Steel in particular is facing an existential threat fuelled by the new levies after talks between its Chinese owner Jingye and the Government over a funding package broke down last week.
The company is now planning to close two blast furnaces in Scunthorpe, putting 2,700 jobs at risk. The shutdown would also leave the UK as the only country in the G7 group of developed nations without the ability to produce its own steel.
Earlier this week, local councillors in North Lincolnshire called on the government to nationalise British Steel to safeguard jobs at the Scunthorpe plant.
The move has not been ruled out, but industry minister Sarah Jones has said the ‘preferred approach’ would be to hash out a deal with Jingye to keep the plant open.
Burberry
Burberry, the maker of the iconic trench coat, is one of the UK luxury goods companies set to be hit by tariffs.
The Americans buy £13billion worth of British luxury products of every type each year.
But they have a particular passion for Burberry’s cool Britannia style. In the last financial year, the company’s North American sales amounted to £603million, 20 per cent of total turnover.
Last Christmas a return to the classic Burberry plaid and other ranges caused a bounce in demand at Burberry’s 50 stores in the US which are in upmarket retail districts in New York and Los Angeles.
In the last financial year, Burberry’s North American sales amounted to £603million, 20 per cent of total turnover
The importance of the US to the brand is reflected in the appointment of an American – Joshua Schulman – to the post of chief executive last summer.
Burberry, which makes some of its coats in Yorkshire, is not the only British brand close to the hearts of American luxury lovers.
Others include Mulberry, 40 per cent of whose handbags are manufactured in Somerset, and Watches of Switzerland which, despite its name, is a British company with stores in the US.
Other smaller businesses include Smythson, the stationery group and small craft furniture firms whose bespoke output adorns uptown Manhattan penthouses.
Walpole, the British luxury goods trade body, says that North America is one of the biggest global markets for our upmarket brands, representing 24 per cent of exports of such items.