The UK’s retail, hospitality and leisure sectors are facing mounting pressure as the ripple effects of President Trump’s global tariff policies continue to destabilise trade and drive up costs — despite a temporary 90-day pause on new duties.
Amanda French, partner and head of retail and leisure at national law firm Clarke Willmott LLP, warns that the sector is grappling with prolonged uncertainty, particularly as the threat of renewed US tariffs and the ongoing trade war with China loom large. “Retailers were already dealing with an additional £5.6 billion in costs from the October Budget, driven by rises in the National Living Wage, National Minimum Wage, and employers’ National Insurance contributions,” said French. “For an industry heavily reliant on part-time, lower-paid staff, the changes to NIC thresholds — now applying on earnings above £5,000 — equate to an added cost of around £615 per employee, before factoring in wage increases.”
Business rates are another pressure point. Some properties are expected to see their rates nearly double, while the retail, hospitality and leisure relief, which provided a 75% discount since 2020/21, will now be reduced to just 40%.
While Trump’s decision to delay the imposition of higher tariffs on countries including the UK offers “some welcome breathing space,” French says the reprieve is likely to be temporary. “There remains deep uncertainty about what happens after the 90-day pause, especially as the US continues its tit-for-tat trade battle with China. That leaves UK businesses facing not only volatile supply chains, but also rising operational costs and shifting consumer behaviour.”
A recent survey by the British Chambers of Commerce found that 62% of UK firms with trade exposure to the US expect to be negatively impacted by the tariffs — a significant number of which fall within the retail, hospitality and leisure industries. “Many of these businesses will be forced to raise prices to absorb costs,” French added. “Ultimately, it’s consumers who will pay the price in what is already a challenging economic climate.”
As UK businesses brace for what may lie beyond the tariff pause, industry leaders are calling for greater clarity and targeted support to help weather the growing storm — or risk seeing long-standing sectors squeezed even further.
