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Comment: All things Trump, tariffs and international trade

Tom HaynesBy Tom HaynesMay 2, 20253 Mins Read
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Following president Donald Trump’s infamous ‘Liberation Day’ Rose Garden address, we have repeatedly been asked for our thoughts and how we think this will affect the UK pig sector.

While the situation continues to develop at a rate of knots, in this month’s piece I will to try to spell out what exactly the latest twists and turns mean for our sector, as well as what else might be coming down the track.

For anyone who has been living under a rock for the past few weeks, on April 2, president Trump announced a series of reciprocal tariffs for trading partners across the globe. While the UK got off comparatively lightly, we were still presented with a blanket 10% tariff rate for nearly all exports to the US.

The exception is for the UK car and steel industries, which face the prospect of 25% tariffs. However, a temporary stay of execution was granted on April 9, when a 90-day pause was announced for all higher tariffs, except the baseline 10% and all rates on China. Following so far…?!

UK impact

While the US is a comparatively small market for the UK in terms of volume, AHDB export figures show it is still worth about £24m/year.

There is a specific US demand for a high-value premium product, which in some instances can only be met by UK producers. It is still to be seen what the long-term effect of these 10% tariffs will be, but it is fair to expect that we may see at least some reduction in UK shipments to the US.

However, given this product is going into a high-end consumer market (Whole Foods etc), these consumers are already paying a premium as it is and may just end up paying more for these products.

The potential bigger threat from our point of view is what might come next. The first involves reciprocal tariffs, either applied by the UK or the EU, on imports from the US, such as animal feed – in particular soya. While imports are still comparatively small compared to South America, the UK has an increasing reliance on US soya and soya bean meal.

This will only continue to grow as measures like the European Union Deforestation Regulations and UK Forest Risk Commodities legislation take effect. Additional tariffs on these products will simply push up prices and the cost of production for UK producers.

The second concern comes in the form of concessions made by the UK government as part of a future trade agreement with the US to remove tariffs on the automotive and steel industries.

While more recent commentary indicates the government will not surrender on UK standards, only accepting products that are equivalent in standards to the UK, there is still an expectation that it may allow greater volumes of US imports through quotas.

While this is certainly a more positive step, where increased US imports could potentially displace other imports, we continue to hold the position that we cannot allow produce into the UK that would not meet domestic production standards, and undercut British producers.

The final caveat to all of this remains that this is a rapidly changing situation, and there is every possibility that events will have overtaken us, even before you read this.

While the narrative coming out of Whitehall is certainly an improvement, we understand that the US is still keen to secure greater access for American agri-food products, so we are far from out of the woods yet.

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Tom Haynes

Tom Haynes is NPA senior policy adviser

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