The uneven storm: the impacts of U.S. tariffs on British cities
Weaker economies in the UK are set to be hit hardest by Trump’s tariffs.
Weaker economies in the UK are set to be hit hardest by Trump’s tariffs.
The global tariff imposed by the United States looks set to significantly affect the UK economy. Every corner of the UK will feel the economic impact, but the damage will not spread equally across places. Places with more goods exports, to the US or in general, can expect stronger impacts.
So how does each city fare in this?
The U.S. tariffs will affect all goods exports from the UK. So the share of US goods exports in all exports is a good way to measure the exposure of a city to the tariffs. Figure 1 shows the exposure of each British city with this method.
The tariffs will have a direct impact on the economies of all cities, but the pain will not be felt equally. The most exposed city is Coventry, where 22.1 per cent of its total exports are estimated to be goods to the US This is followed by Derby (19.9 per cent), Telford (13.3 per cent), Worthing (15.3 per cent) and Blackpool (13.3 per cent).
On the other hand, the least impacted city, York at 2.7 per cent, is about seven times less exposed by Coventry. Other low-exposure cities include Edinburgh (2.9 per cent), London (3.2 per cent), Reading (3.4 per cent) and Cardiff (3.7 per cent). These cities will face less direct tariff impacts because their economies are more service-oriented, and their goods exports make up a small share of their export industries.
The direct impact of tariffs on regions is similarly uneven. Figure 2 shows the regional exposure to tariffs. The exposure is estimated for cities and entire regions.
By both metrics, West Midlands would be the most exposed area. The region has a large machinery and transport sector, including car manufacturing. Wales would be the second most exposed area, though the impacts are more severe outside cities.
The Greater South East, including South East and London, is less exposed than the rest of the country since its economy depends more on services. The Greater South East is also more economically prosperous and productive than the rest of the country. So the tariffs could have a larger impact on struggling economies.
Less productive cities are more likely to have higher exposure to tariffs. Figure 3 shows the relationship between the productivity of a city’s export base and exposure to US tariffs.
So the tariffs will serve to further reinforce the disparities in economic performance that already exist across the country. As the Government aims to “shelter British businesses” from the impacts of tariffs, the data shows that it will need to factor in geography as part of its response.
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