Trump’s tariffs would trigger greater costs and fewer selection on grocery store cabinets, provide chain professional warns | EUROtoday

Donald Trump’s plan to slap 10 per cent tariffs on the UK would go away Britons going through greater costs and fewer selection on grocery store cabinets, a provide chain professional has warned.

Oisín Hanrahan, the co-founder and chief govt of Keychain, which works with main supermarkets to determine excessive prices within the provide chain, advised The Independent that the tariffs “wouldn’t stay confined to trade statistics, it would start showing up in the weekly shop”.

It got here amid warnings that the export levy may wipe 0.1 per cent off Britain’s GDP – growing to as a lot as 0.3 per cent if the tariff is elevated to 25 per cent as Mr Trump has threatened – successful that might tip the UK’s ailing economic system into recession.

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On Saturday, the US president stated he would cost Britain a ten per cent tariff “on any and all goods” despatched to the US from 1 February, growing to 25 per cent from 1 June, till a deal is reached for Washington to buy Greenland from Denmark.

Mr Trump stated the identical would apply to Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland – all of whom are members of Nato.

Speaking concerning the US president’s newest threats, Mr Hanrahan advised The Independent: “A ten per cent US tariff on UK exports wouldn’t keep confined to commerce statistics, it will begin displaying up within the weekly store.

“The US is one of Britain’s most important export markets, and making that market more expensive to serve has knock-on effects that ripple through food supply chains.

“For many British food producers, exports are what keep factories running at scale. When tariffs squeeze margins in the US, firms respond by cutting volumes, delaying investment or trying to recover costs elsewhere.”

He added: “Lose scale, and unit prices rise, growing the chance of upper costs, fewer reductions and fewer selection on UK grocery store cabinets, notably in processed and branded meals the place quantity issues most.”

So far, Sir Keir Starmer has ruled out retaliation, saying a tariff war “isn’t in anybody’s interest” and that he is “making sure we don’t get to that stage” – despite Germany and France weighing up hitting the US with retaliatory tariffs.

“I want to do is to avoid a tariff war, because it will be businesses, workers and families across the country that will be hit by a trade war,” the PM said in a press conference on Monday morning.

But Mr Hanrahan warned that if the UK did decide to retaliate, the “impact on consumers would be more immediate”.

“Tariffs on US imports would raise costs on products and inputs such as nuts, peanut butter, corn-based ingredients and food packaging materials, with those increases passing quickly through manufacturers and retailers into prices”, he said.

Meanwhile, John Wyn-Evans, head of market analysis at asset management group Rathbones, warned that 10 per cent tariffs could knock 0.1 per cent off Britain’s fragile economic growth.

“The economic impacts are not to be underestimated”, he said. “A 10 per cent tariff could shave around 0.1 per cent off GDP for the most exposed economies, notably the UK and Germany, while a 25 per cent rate could hit output by 0.2-0.3 per cent.”

“Ultimately, this episode reinforces the shift away from ever-increasing global integration and toward a world defined by sharper spheres of influence – a reality businesses and investors must increasingly plan for and deal with”, he added.

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Meanwhile, Paul Dales of Capital Economics estimated that the affect may very well be even worse than this, estimating that Britain’s GDP would shrink by 0.3 to 0.75 per cent if the brand new levies threatened by the US president are imposed on prime of the ten per cent import tax already utilized to UK items.

“With the UK economy currently growing by 0.2 – 0.3 per cent a quarter, if this hit came all at once it could trigger a recession”, he stated.

In an indication of the seriousness with which the federal government gave the impression to be taking the threats from the US, chancellor Rachel Reeves was among the many senior Cabinet ministers sat within the viewers on the prime minister’s announcement, having pulled out of a Monday morning occasion on the London Stock Exchange.

Sir Keir additionally deserted plans for a Monday cost-of-living associated go to on the eleventh hour to make the announcement, with the PM promising to talk with the US president about Greenland once more within the coming days after the 2 spoke on the cellphone on Sunday evening.