Tariffs have long been central to Trump's plans to boost US manufacturing, create jobs and lower prices. With the U.S. market being a critical destination for Welsh food and drink exports, with iconic products like Penderyn, Snowdon Cheese Co and Welsh lamb finding favor among American consumers, the impact on on Welsh food & drink exporters remains somewhat unknown.
The potential for new U.S. tariffs on imported goods poses a significant challenge to these exporters, potentially impacting pricing, competitiveness, and long-term market growth.
The Impact of Tariffs
Tariffs on goods entering the U.S. typically raise costs for exporters, which are often passed on to consumers through higher prices. For Welsh producers, this could erode the competitive edge of premium goods, particularly in a market where buyers are already facing inflationary pressures. For instance, Welsh whiskey or lamb, known for its high quality, may struggle against domestic or alternative suppliers offering similar products at a lower price point.
Additionally, smaller Welsh producers, who may lack the scale to absorb tariff-related costs, could be disproportionately affected, forcing some to reevaluate their market strategies.
The recently proposed U.S. tariffs could significantly impact Welsh food and drink exporters, a sector that has seen substantial growth in recent years. In 2023, Welsh food and drink exports totalled £23m, having decreased by £1.0m from 2023, but increasing by £3.2m from 2019. Miscellaneous Edible Products and Preparations was the highest value category, at £10.7m, a £0.2m increase from £10.4m in 2022. UK food and drink exports to the US were worth £2.4bn in 2023.
The U.S. is one of the fastest-growing markets for Welsh exports, with businesses leveraging international trade events and partnerships to boost visibility and sales. However, the introduction of tariffs could hinder this progress, making Welsh products less price-competitive against local or other international suppliers. For context, EU exports accounted for £611m in 2023, a £17m increase from 2022. This accounted for 75% of the total value of Welsh Food and Drink exports.
In the face of these challenges, Welsh producers will need to explore strategies such as diversifying export markets, leveraging the strong “Made in Wales” brand, and working closely with trade bodies to mitigate tariff-related costs.
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