UK exports to the U.S. plunge by most on record as tariffs bite

U.K. goods exported to the U.S. dropped by £2 billion ($2.71 billion) in April, figures published by the Office for National Statistics on Thursday showed, marking the biggest monthly decrease since records began in 1997.

The value of Britain's exports stateside was the lowest since February 2022 at £4.1 billion, with the ONS saying the shift was "likely linked to the implementation of tariffs on goods imported to the United States." Cars, chemicals and metals exports all saw declines, the ONS said.

U.S. imports to the U.K. dipped by £400 million for the month to £4.7 billion, taking Washington back to a trade surplus in goods with the country for the first time since May 2024. Trade data shows U.K. businesses heavily ramped up their exports to the U.S. from the start of 2025 as rumors about the introduction of tariffs — eventually confirmed on April 2 — swirled.

The main goods sent by the U.K. to the U.S. include automotives, medicines, mechanical generators, scientific instruments and aircraft. The U.K. meanwhile has a strong appetite for U.S. oil, as well as its own pharmaceutical products and aircraft.

The U.K. and U.S. announced the outline of a trade deal at the start of May, but the agreement still imposed 10% blanket tariffs on British goods sent stateside and has not yet been fully implemented. U.S. President Donald's Trump's universal 25% duties on steel and aluminum are set to be slashed to zero for the U.K., while up to 100,000 British cars a year will be hit with a rate of 10% rather than 25%, but higher tariffs remain in force while final details of the deal are confirmed.

Trump has looked relatively favorably upon the U.K. during his second presidency while he has slammed other key trading partners such as the European Union. That's in part because of his friendly relations with British Prime Minister Keir Starmer, but primarily because the U.K.-U.S. trade relationship in goods has historically been relatively balanced.

Overall, the U.K.'s trade deficit in goods rose by £4.4 billion to £60 billion in the three months to April, while its trade surplus in services dipped by £500 million to £48.5 billion.

That took the total trade deficit across both goods and services to £11.5 billion from £6.6 billion.

The ONS noted in its release that monthly trade data could be "erratic" and that its next data set would account for the subsequently-agreed trade deal.

Figures also published by the ONS on Thursday showed the U.K. economy contracted by 0.3% in April, below the 0.1% expected by economists polled by Reuters. The U.K.'s dominant services sector was a weak point, shrinking 0.4%, while construction output increased by 0.9%.

It follows signs of a weakening U.K. labor market out earlier in the week, with job vacancies down 7.9%, and the employment rate rising to 4.6% from 4.5%. The rate of wage growth eased to 5.3% from 5.6%, with markets subsequently fully pricing in another half-percentage-point interest rate from the Bank of England before the end of the year.

Business sentiment remains on edge, due to tariffs and macroeconomic uncertainty, and because of government policies including a minimum wage hike, new worker protections and higher tax rates for employees.

Sanjay Raja, chief U.K. economist at Deutsche Bank, said the U.K. economy was "always on a collision course for a course correction after a super strong start to the year."

Growth hit 0.7% in the first quarter, accelerating from 0.1% growth in the final quarter of 2024.

"While headwinds in April will likely soften in the coming months, they won't dissipate fully. Despite the U.K.'s trade deal with the US, trade uncertainty is here to stay. The labor market continues to loosen too, which will weigh on household spending. And monetary policy remains restrictive, which will also drag on output," Raja said in a note.