UK chemicals industry calls US tariffs ‘another blow’ to sector

London – The UK Chemical Industries Association (CIA) has described a 10% additional duty on UK exports to the US as “another blow” to the industry as it grapples with high manufacturing costs locally.

Energy bills in the UK, according to CIA chief executive Steve Elliott, are 400% higher than those in the US and up to 100% higher than in Europe.

“These additional costs will mean companies looking again at their UK future,” Elliott said in a 3 April statement.

Urging the government to hold talks with the US over the new tariffs, Elliott said minimising the impact of such costs and securing a wider trade agreement were “an urgent priority.”

According to CIA data, the chemicals and pharmaceuticals industry is the UK’s second-largest exporter, with a combined export revenue of £55 billion (€64.5 billion) in 2024.

The industry’s export value to the US stood at £11 billion last year – £5 billion in chemicals and £6 billion in pharmaceuticals – accounting for 40% of non-EU trade.

Nearly a quarter (23.6%) of all UK chemical exports went to the US in 2023, with even higher shares for organic chemicals (27.8%) and pharmaceutical products (33.9%).

Furthermore, many US companies operating in the UK trade directly with parent plants in the US.

These companies, CIA noted, would also be hit by the new tariffs, affecting their competitiveness.

According to the industry association, during UK-US free trade talks under the first Trump presidency, the CIA and the American Chemistry Council agreed that full tariff liberalisation on chemicals would provide an annual £200 million boost to both economies.

“Applying new tariffs does the opposite,” warned the CIA adding that the move limits growth by reducing the amount available for R&D and new capacity.