Food and drink industry set for another turbulent year due to US tariffs, but exporters can turn crisis into opportunity

It’s been a turbulent decade for the UK food and drink industry, particularly its exporters.

Since the post-Brexit UK-EU Trade and Cooperation Agreement (TCA) entered force in 2021, food and drink exports to the EU have dropped by almost a quarter compared to the preceding five-year period, according to figures from the Food and Drink Federation (FDF).

And now, just a couple of weeks into 2026, the sector is bracing itself for volatility in its third largest export market in the US.

US uncertainty

President Trump has threatened to impose additional 10% tariffs on UK goods from the start of February due to the ongoing dispute over Greenland. These tariffs could rise to 25% from 1 June, Trump has said, and they come on top of the 10% ‘reciprocal’ rates he introduced last year.

We know from previous tariff announcements that things can change incredibly quickly. The ‘TACO’ label (‘Trump always chickens out’) has come about following previous rescindments of outlandish tariff threats by the US president. Many businesses have been reticent about making significant changes to their trade because of this unpredictability. That said, our director general, Marco Forgione, has heard from businesses in the sector that they are currently accelerating exports to the US now, ahead of 1 February, to avoid the possibility of needing to pay higher duties.

“I’ve spoken to food and drink business [since the announcement] and a lot who are exporting to the US are now looking to see if they can frontload exports and get products over there before 1 February”, he told the Grocer.

Whichever way this latest tariff saga plays out, the one thing food and drink exporters to the US can be certain of is further uncertainty.

Diversification is key

Tariffs will no doubt be a major topic of discussion at the annual International Food & Drink Event at Excel London in the spring, where I am looking forward to participating in a couple of panel discussions on behalf of the Chartered Institute. One of these, a fireside chat with our leading food and drink trade compliance expert Joe Goldsworthy, will be looking at the extent to which the UK’s free trade agreements (FTAs) can be used to propel exports to other markets beyond the EU and US.

The UK now has a wide array of partners around the world with which it can trade on newly preferential tariff terms through FTAs. This includes Australia, South Korea, and the 11 members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Japan, Canada and Mexico. Furthermore, with the India trade deal on the horizon, and other agreements being negotiated, exporters can plan ahead to access more new markets in the not-too-distant future.

These FTAs offer UK food and drink businesses new opportunities to diversify their supply chains and exports during a period of ongoing change in our more traditional overseas markets. Indeed, FDF stats show that UK exports to non-EU partners have outpaced sales to the EU in recent years, and the government will, I’m sure, be keen to build on this momentum.

Compliance skills matter

Exporting to new markets isn’t a simple task though, particularly for SMEs. To benefit from FTAs, businesses need to be able to comply with various rules and procedures, including at-times complex rules of origin. There are also major distances involved in exporting goods to FTA partners like Australia or New Zealand, which emissions-conscious businesses could think twice about.  

While market diversification will continue to be a theme for the sector in the UK, many in the industry will be hoping that the promised UK-EU Common Sanitary and Phytosanitary (SPS) Area comes to fruition, supporting trade closer to home. This SPS deal, which we advocated for in a paper about the EU relationship last year, would significantly simplify exports to the EU, albeit, businesses would still need to ensure compliance with the TCA, which has its own origin rules and customs requirements.

That’s where organisations like the Chartered Institute can support traders though, and this will be the main theme of me and Joe’s discussion at IFE. We’ll be talking about exporting to the UK’s FTA partners – from the EU to Japan – at 2pm on Monday 30 March at the event. Book your place here.