In April, the value of goods exported from the U.K. to the U.S. fell by £2 billion ($2.71 billion), according to data released by the Office for National Statistics (ONS) on Thursday. This decrease marks the largest monthly drop since records began in 1997.
Exports to the U.S. plummeted to £4.1 billion, the lowest level since February 2022. The ONS attributed this decline to the introduction of tariffs on goods entering the United States. Notably, exports in categories such as automobiles, chemicals, and metals experienced significant setbacks.
Conversely, imports from the U.S. to the U.K. saw a reduction of £400 million, settling at £4.7 billion for the month. This shift allowed the U.S. to regain a trade surplus in goods with the U.K. for the first time since May 2024. Trade data indicates that U.K. businesses had significantly ramped up exports to the U.S. early in 2025 amid speculation about impending tariffs, which were confirmed on April 2.
The primary exports from the U.K. to the U.S. include automobiles, pharmaceuticals, mechanical generators, scientific instruments, and aircraft. In return, the U.K. maintains a strong import demand for U.S. oil, pharmaceutical products, and aircraft.
At the beginning of May, the U.K. and U.S. outlined a prospective trade agreement, although this deal still applies a blanket tariff of 10% on British goods sent to the U.S., which has yet to be fully enacted. An adjustment to U.S. President Donald Trump’s previous universal 25% duties on steel and aluminum is in the works, potentially reducing them to zero for the U.K. Furthermore, up to 100,000 British cars annually will face a 10% tariff rather than the previous 25%, though higher tariffs will remain until the deal’s final terms are confirmed.
During his second presidential term, Trump has expressed a favorable stance toward the U.K., particularly in light of supportive relations with British Prime Minister Keir Starmer, contrasting sharply with his treatment of other key trading partners like the European Union. Historically, the U.K.-U.S. trade relationship has maintained a relatively balanced nature.
The overall trade deficit in goods for the U.K. widened by £4.4 billion to £60 billion in the three months leading to April, while the trade surplus in services fell by £500 million to £48.5 billion.
As a result, the combined trade deficit across goods and services increased from £6.6 billion to £11.5 billion.
The ONS highlighted that monthly trade statistics can be prone to volatility and indicated that future data sets will reflect the recently agreed trade terms.
In another report from the ONS, the U.K. economy contracted by 0.3% in April, which was worse than the 0.1% contraction economists had projected. The services sector, which is pivotal to the economy, shrank by 0.4%, whereas construction experienced a modest increase of 0.9%.
This release came in the wake of indications that the U.K. labor market is weakening, with job vacancies decreasing by 7.9%, and the employment rate rising to 4.6% from 4.5%. Wage growth also slowed down to 5.3% from 5.6%, leading markets to fully anticipate another half-percentage-point interest rate hike from the Bank of England before the year ends.
Ongoing uncertainty around tariffs, along with macroeconomic factors and government policies—such as a rise in minimum wage, new worker protections, and higher employee tax rates—are keeping business sentiment cautious.
Sanjay Raja, chief U.K. economist at Deutsche Bank, commented on the state of the economy, noting that it was “always on a collision course for a course correction after a super strong start to the year.”
The first quarter saw growth of 0.7%, significantly up from just 0.1% growth in the last quarter of 2024. “While challenges in April are likely to ease in the coming months, they are unlikely to disappear entirely. Despite the new trade agreement with the U.S., trade uncertainties persist. The labor market is also loosening, which could dampen household spending, and monetary policy remains restrictive, negatively impacting overall output,” Raja added in a statement.
