UK Businesses Hit by 'Tariff Fatigue' as US Trade Uncertainty Deepens
British businesses are experiencing widespread "tariff fatigue" as a year of persistent US trade threats and shifting legal frameworks continues to undermine confidence, investment, and export planning — with nearly half of affected firms now prioritising trade diversification over US negotiations.
A survey by the British Chambers of Commerce (BCC) found that 33% of UK businesses exposed to US tariff threats are already taking action, while a further 21% say it is too early to assess their exposure. Among those responding, 17% are conducting contingency planning, 12% are planning strategic shifts to reduce reliance on the US market, and 4% are making active operational adjustments such as changing supply chains or shelving investment plans.
The Current Tariff Landscape
A 10% baseline tariff currently applies to most UK goods imported into the United States, established under the Economic Prosperity Deal (EPD) signed in May 2025. However, the legal basis for several US tariffs shifted in February 2026 after a US Supreme Court ruling determined that the International Emergency Economic Powers Act did not authorise the president to impose tariffs. The US subsequently imposed a new global 10% tariff under Section 122 of the Trade Act of 1974, valid for 150 days unless extended by Congress.
The UK has secured some sector-specific exemptions: automotive tariffs were reduced to 10% on up to 100,000 UK-made cars annually; a pharmaceutical deal struck in December 2025 allows tariff-free exports of UK medicines for three years; and UK timber exports are capped at 10%. However, the UK's terms remain less favourable than those secured by the EU and Japan, potentially eroding the UK's competitive position in the US market.
New Investigations Raise Fresh Concerns
The US Trade Representative has launched new Section 301 investigations into forced labour practices, with the UK included in scope due to concerns that its Modern Slavery Act does not meet US legal requirements. Unlike Section 122 tariffs, Section 301 duties carry no upper limit, raising the prospect of uncapped additional tariffs. Public hearings are scheduled for April 2026. Further investigations into Digital Services Tax — which would also include the UK — are anticipated.
Business Response and Government Pressure
The BCC report found that nearly half (45%) of exposed UK firms now want the government to prioritise closer trade relationships with other markets, including the EU and India, rather than focusing solely on US negotiations. Support for managing risk through US negotiations alone has fallen sharply, from 44% to 24%.
Real-world impacts are already being felt. A Northern Irish retailer reported cautious consumer spending and reduced overseas orders, while a Lancashire firm described cancelled projects and a shift of planned UK production to China, with US investment shelved entirely.
What Businesses Are Asking For
Firms are calling on the government for a stronger export support framework, including improved trade mechanics, digitisation of customs systems, and targeted improvements in key markets. The BCC has warned that trade volatility is now a structural feature of the global system, requiring a more strategic and coordinated approach to supporting UK exporters.
For the latest trade guidance, visit the British Chambers of Commerce.
