Britain’s retail, hospitality, and leisure industries are under growing strain as the knock-on effects of President Donald Trump’s global tariff policies continue to rattle international trade, despite a temporary 90-day pause on new US duties.
Amanda French, partner and head of retail and leisure at Clarke Willmott LLP, says businesses in these sectors are grappling with significant and sustained uncertainty. The delay in new US tariffs has offered brief relief, but concerns persist about the long-term impact of the ongoing trade war between the US and China — and its implications for UK companies.
“Retailers were already facing £5.6 billion in additional costs following the October Budget,” said French. “Rises in the National Living Wage, National Minimum Wage, and employers’ National Insurance contributions are hitting hard, especially in industries that rely heavily on part-time and lower-paid staff.”
French added that changes to National Insurance Contribution thresholds — which now apply to earnings above £5,000 — have increased the cost burden by around £615 per employee, even before accounting for higher wage payments. She warned that for many in the sector, the combination of tax and labour pressures is becoming unsustainable.
Business rates present another looming challenge. While the retail, hospitality and leisure sectors had benefitted from a 75% relief on business rates since 2020/21, this support has now been scaled back to just 40%. Some properties could see their rates nearly double, adding yet another layer of financial pressure.
Although President Trump’s decision to delay the implementation of higher tariffs for 90 days offers “some welcome breathing space,” French cautioned that the break is likely temporary. “The uncertainty of what follows remains troubling. With the US still entangled in a tit-for-tat trade war with China, UK businesses are left to navigate volatile supply chains, rising operational expenses, and unpredictable shifts in consumer demand,” she said.
A recent British Chambers of Commerce survey revealed that 62% of UK businesses with trade ties to the US expect to be negatively affected by the tariffs. Many of these firms are in the retail, hospitality, and leisure industries, where rising costs could soon be passed on to consumers. “Prices are likely to go up,” French noted, “and ultimately, it’s consumers who will feel the pinch in an already fragile economy.”
Industry leaders are now urging the UK government to provide clearer guidance and targeted support measures. Without swift intervention, there are fears that some long-standing businesses in the country’s high streets and hospitality hubs may not survive the latest wave of economic uncertainty.
