Amid rising import duties imposed by the Trump administration, Chinese companies have started to export more goods to the UK. This shift could affect inflation in the UK and local producers.
Change in Trade Flow Due to US Tariffs
The Trump administration more than doubled the import duties on Chinese products to 55%. This made it much costlier for Chinese companies to sell their goods in the US market, prompting them to switch shipments to European markets where trade restrictions are more lenient.
Data shows that China's small parcel exports to the UK surged by 66% in May compared to last year, with the total value of these parcels reaching nearly $2 billion in the first five months of 2025.
Impact on the UK Economy
Chinese smartphone shipments to the UK rose by 26% between January and May 2025, while computer shipments climbed by 11% during the same period. Meanwhile, imports of smartphones from China to the US fell by 18% and computers dropped by 25%.
The UK's Office for National Statistics reported goods worth £6 billion ($8.2 billion) imported from China in April alone, marking the highest monthly total in over two years.
Long-term Consequences for Global Trade
UK Business Secretary Jonathan Reynolds stated that the government is closely monitoring signs of trade diversion, where goods originally meant for other countries are redirected to the UK in significant volumes. This may lead to local industries struggling to compete against Chinese goods sold at low prices.
Associate Professor at the London School of Economics, Thomas Sampson warned against making large predictions based on short-term data, despite acknowledging early signs of trade diversion from the US to the UK.
The long-term impact on the market will depend on how global trade flows evolve in the coming months. UK authorities remain vigilant and ready to act if necessary.
