Exporters feel impact of Trump tariffs and JLR crisis

Raj Kandola, acting deputy CEO at Greater Birmingham Chambers of Commerce

A slowdown in global trade activity among Greater Birmingham businesses has been attributed to the dual impact of President Trump’s tariffs and the recent cyber-security attack on Jaguar Land Rover, according to the latest Quarterly Business Report from the Greater Birmingham Chambers of Commerce.

The report, which covers Q3 and is sponsored by Birmingham City University, paints a challenging picture for exporters — particularly in the manufacturing sector. A third of manufacturers recorded a decline in sales, while the proportion of firms reporting growth fell sharply from 39% in Q2 to just 17% in Q3. The number of businesses reporting advanced bookings also dropped significantly, falling from 28% to 11%. However, service exports offered a glimmer of positivity, growing by 4% over the same period.

Raj Kandola, acting deputy CEO at Greater Birmingham Chambers of Commerce, said: “The latest results from the Quarterly Business Report reiterated the uncertain economic terrain that local firms continue to navigate as we approach the end of another eventful year. Domestic activity remained broadly similar to the previous quarter while export activity continues to slow as the fallout from the Trump tariffs and JLR’s cyber security attack continues to dent international sales.”

Biggest cost pressure
While price pressures appear to be levelling out — with 57% of firms expecting prices to remain stable over the coming months — labour costs continue to squeeze margins. 33% of businesses cited labour costs as their biggest cost pressure, a situation made worse by the increase in employer National Insurance Contributions announced in the 2024 Autumn Budget. Anecdotal evidence suggests many firms are choosing to absorb these additional costs rather than pass them on to customers.

Corporate taxation remains a key concern for 29% of businesses, although this figure has eased slightly from Q2. With the Autumn Budget taking place at the end of November, the Chamber is urging the Chancellor to avoid imposing further tax burdens on businesses.

Mr Kandola added: “Recruitment challenges remain apparent and while price pressures have fallen from the peak witnessed earlier in the year, the fact remains that capex investment has been squeezed and concerns related to inflation and corporate taxation remain prominent — especially with the Autumn Budget around the corner. Despite these challenges, it is reassuring that profitability projections remain firmly anchored in positive territory — a testament to the ongoing resilience displayed by local firms.

“Clearly, if the Government is serious about unlocking growth, then it is essential that we see a clear commitment to not raising taxes further on businesses. Within this context, the Chancellor will need to produce a Budget which restores business confidence, encourages investment, drives international trade and tackles longstanding skills gaps if we are to restore momentum and look forward to 2026 with a degree of optimism.”