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Attila Kecsmar CEO of Antavo says the real issue lies in the pace of change
Tarnavölgyi Zoltán
It’s bad, but just how bad? That’s the question a great many U.K. startups and small businesses are asking themselves as the Trump administration’s newly minted tariff regime heaves into view.
Outside of the steel and automotive industries, the U.K. has got off relatively lightly with a tariff of 10% on goods compared with the 20% imposed on the European Union. Nevertheless, as I sit down to write this piece, the FTSE-100 index is down nearly 4.0 and the Prime Minister is announcing emergency measures to protect the domestic car industry.
Amid the panic, small and medium-sized businesses are trying to work out what the sudden change in the world trading order means for them. On the face of it, many will not be affected. Services companies don’t fall into the Tariff net - good news for software-focused startups - and for goods shipped directly to consumers from the U.K. to the U.S, there is a threshold at which taxes are applied. As things stand, relatively low-value packages are not subject to charges.
What Britain’s small businesses are facing, though, is a huge amount of very unwelcome uncertainty, which could affect their ability to trade with the U.S. even if the tariffs themselves are not seen as too onerous.
A Limited Impact?
U.K. companies exported £182.6 billion in goods and services to the U.S. in the 12 months leading up to the end of Q3, 2024, according to government figures, so at a macro level, any increase in import charges has the potential to do some real economic damage.
However, according to Dr Joseba Martinez of London Business School’s Economics Faculty, the overall impact on SMEs is likely to be limited. As he sees it, distance tends to be a deterrent to export activity, and the U.S. market is a long way away. Another factor to consider is that very small companies find exporting too difficult and, thus, concentrate on their domestic markets.
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