Trump's Tariff Threats Cast Shadow Over UK Small Business Survival
The spectre of escalating US tariffs on British imports has sent shockwaves through the UK's small business community, with entrepreneurs warning that further trade restrictions could prove catastrophic for their operations. Donald Trump's latest threat to impose additional levies on goods from countries opposing his pursuit of Greenland has particularly alarmed business owners already reeling from existing tariffs.
"My Heart Sank": Business Owner's Despair at New Tariff Threat
Martha Keith, founder and chief executive of Dorset-based stationery company Martha Brook, described feeling physically sickened when reading about the potential new tariffs. "What happened last year had a huge impact on us", she revealed. "When I read the news at the weekend my heart sank again."
The US president has declared that the UK and other nations opposing his Greenland ambitions would face 10% tariffs on all products from next month, escalating to 25% from June 1st until Washington secures control of the Danish territory. This comes after 10% tariffs were introduced last year on a wide range of British goods, though exemptions existed for steel, aluminium, aerospace and automotive sectors.
Transatlantic Trade Under Threat
For Martha Brook, which manufactures stationery in the UK and sells directly to customers online, the implications are severe. Approximately 40% of their sales come from US buyers through platforms like Etsy, making the American market crucial to their business model. "The US has been a very big, growing part of our business", Ms Keith explained. "Before the tariffs, we were up 50% on Etsy - it was a massive area of growth for us. Now they're down 50%. The swing is astonishing."
She believes even the threat of higher tariffs damages business by undermining consumer confidence in the United States, compounding reduced sales since Mr Trump's existing tariffs were implemented last year.
Economic Consequences and Political Response
Prime Minister Keir Starmer has described the tariff threat as "completely wrong" and urged calm, warning that a trade war would "benefit nobody". Economic analysts fear the UK and EU could be plunged into recession, with potential damage to UK GDP reaching £22 billion.
The stakes are particularly high given the US was the UK's largest trading partner between July 2024 and July 2025, accounting for 17.8% of total UK trade according to Office for National Statistics data.
Small Business Vulnerability
William Bain, head of trade policy at the British Chamber of Commerce, emphasised the disproportionate impact on smaller enterprises. "New tariffs on goods exported to the US will be more bad news for UK exporters, already struggling with the tariffs levied last year", he stated. "We know trade is one way to boost the economy and the success of transatlantic trade depends on reducing, not raising, tariffs."
Ms Keith's experience illustrates this vulnerability perfectly. She absorbed the extra costs of last year's tariffs rather than passing them to consumers, costing her business $7,500 (£5,500) on products already sold before sales "dropped dramatically" when tariffs were implemented.
Broader Business Climate Challenges
The tariff threat represents just the latest challenge for UK small businesses already navigating post-Brexit complexities, pandemic recovery, and rising operational costs. "This is the direct to consumer route, this is how a lot of businesses in the UK start and they grow", Ms Keith noted. "It has become so hard post-Brexit, with the intricacies of European shipping, different packaging regulations for every country, GPSR - it's one thing after another."
Geoffrey de Mowbray, chairman of the British Exporters Association, warned that tariffs threaten "years of hard work, travel, and investment" British businesses have dedicated to building transatlantic relationships. "The idea that new tariffs could be imposed with little warning leaves businesses unsure how to plan or price for the months ahead", he cautioned.
Government Data Reveals Small Business Significance
Michelle Ovens, chief executive of Small Business Britain and adviser to the UK Government's Board of Trade, highlighted the critical importance of small enterprises to UK-US trade. Government data from September 2025 shows that while just 17% of SMEs export, they account for almost half (44%) of UK exports to the United States.
"This makes small businesses a critically important part of the conversation and particularly sensitive to sudden changes in trading conditions", Ms Ovens emphasised.
Testing Resilience to Breaking Point
For business owners like Martha Keith, the situation represents an existential threat. "It's absolutely something that threatens the future of a business like ours", she stated frankly. "Last year was the first year that it felt like that model was truly under threat. We've come into this year really thinking about how we can do things differently and innovate."
She described the current climate as particularly challenging for businesses born from passion projects and hobbies. "When I started this business, it felt like if you had a passion project, it was something you could do as a career. I employed a lot of people but it's come to a point now where it's not an amazing thing to do any more. Even if it's something you love, it feels so tough."
Despite the challenges, Ms Keith remains determined to continue. "We've committed to keep going and navigating this", she affirmed. "Small business owners are very resilient but this is really testing the resilience. It feels very frustrating and it has had a demonstrable financial impact on our business already. I think, if there are any more tariffs brought in, we could see a further impact which would be quite devastating."
