6th May 2026
The Office for National Statistics has released its most detailed assessment yet of how President Trump’s 2025 tariff regime has reshaped UK–US trade. Covering the period from April 2025 to February 2026, the report offers a stark picture. UK exports to the United States have fallen sharply, imports have risen, and the UK’s long‑standing goods surplus with America has flipped into deficit for the first time in years.
For a country where the United States remains the largest single export market for goods, the implications are significant — not only for national exporters, but for regional economies like the Highlands that rely on manufacturing, chemicals, and high‑value goods moving across the Atlantic.
A Sudden Shock: UK Exports Collapse After Tariffs Hit
The ONS data show a dramatic turning point in April 2025, when the US imposed a blanket 10% tariff on most UK goods, alongside a 25% tariff on cars and car parts.
The immediate impact was severe:
Exports to the US fell by £1.5 billion (24.7%) in a single month.
Export levels have remained below pre‑tariff norms throughout the entire April 2025–February 2026 period.
UK exporters consistently reported higher costs, delays and administrative burdens linked to the new tariff regime.
The ONS notes that 33% of UK exporters with 10+ employees reported being affected by US tariffs as of February 2026, with nearly one‑fifth reporting direct additional costs.
Imports Rise — and the UK’s Trade Balance Turns Negative
While exports fell, imports from the United States increased, particularly in late 2025 and early 2026. By January 2026, imports peaked at £5.3 billion, driven by:
higher imports of machinery and transport equipment, including aircraft
fluctuations in fuel imports, especially crude oil
The result:
For three consecutive months from December 2025, the UK recorded a goods trade deficit with the United States — a reversal of the long‑standing surplus.
The Sector Breakdown: Cars and Pharmaceuticals Hit Hardest
Cars: A 39.5% collapse in exports to the US
The automotive sector suffered the most dramatic decline:
Monthly car exports to the US fell by £0.3 billion, a drop of 39.5%.
Even after the Economic Prosperity Deal reduced tariffs on the first 100,000 UK cars per quarter (from 25% to 10%), exports did not recover.
A major cyber incident in 2025 further disrupted UK car production, contributing to a 24.4% fall in total UK car exports.
The US remains the UK’s largest car export market — but volumes are now significantly lower.
Chemicals: A 15.2% fall, driven by pharmaceuticals
Chemical exports also declined sharply:
Overall chemical exports to the US fell by £0.2 billion (15.2%).
Medicinal and pharmaceutical products — historically a UK strength — fell by 16.2%.
The ONS links this to a US policy shift encouraging domestic pharmaceutical production.
Evidence of Trade Diversion — But Only Slight
The ONS finds small increases in UK exports to:
Hong Kong (+0.8 percentage points)
Germany (+0.6 percentage points)
These shifts hint at exporters seeking alternative markets, but the ONS stresses that the changes are not yet large enough to confirm a structural redirection of UK trade away from the United States.
Why This Matters for Scotland and the Highlands
While the ONS report is national, the implications are very real for regions like the Highlands:
Automotive components, electronics, and precision engineering firms supplying UK manufacturers face reduced demand.
Pharmaceutical and life‑science supply chains, including those linked to Inverness and Moray, feel the knock‑on effects of reduced US demand.
A weaker UK–US trade position increases pressure on the wider UK economy, which in turn affects public finances, council budgets and investment programmes — including those in Highland Council.
For a region already grappling with high transport costs, fragile supply chains and limited export routes, any contraction in UK–US trade amplifies existing vulnerabilities.
The Bigger Picture - A Re‑Wiring of Transatlantic Trade
The ONS report makes clear that the tariff shock has:
Reduced UK export competitiveness in the US market
Increased costs for UK businesses
Shifted trade flows in ways that may become permanent if tariffs persist
Weakened the UK’s overall trade position with its most important goods export partner
The Economic Prosperity Deal softened some of the blow, but not enough to reverse the decline.
A New Era of Trade Friction
The ONS analysis paints a picture of a UK adjusting to a more protectionist United States. The tariff regime introduced in 2025 has reshaped trade patterns, weakened UK export performance, and exposed vulnerabilities in key sectors such as automotive and pharmaceuticals.
For the Highlands, the message is clear. Global trade shocks ripple all the way to rural Scotland, affecting jobs, investment, and the financial resilience of councils and communities.
Read the full ONS report HERE