At ‘The Future of MedTech – Innovating for Tomorrow’ conference, hosted by the British Healthcare Trades Association (BHTA) and AXREM on 13 May 2025 in Northampton, Chris Corkan, Region Director at Make UK, delivered the first part of a compelling talk titled ‘The Economic and Political Landscape’.

Chris provided timely insights into the pressures and prospects currently facing UK manufacturers.

Chris opened by highlighting manufacturing’s enduring value to the UK economy – contributing over £200 billion in output, offering higher-than-average wages, and forming the backbone of many local communities. However, he also noted a concerning milestone: for the first time, the UK has dropped out of the world’s top 10 manufacturing nations, a shift driven by global geopolitical upheavals and intensified foreign investment elsewhere.

The central message of his address was clear: a robust, long-term industrial strategy is essential. Encouragingly, the UK Government has committed to one, with more details expected in June. Over 99 percent of UK manufacturers, according to Make UK, support the need for such a strategy to provide long-term certainty and support investment. For BHTA members, this could mean more predictable planning environments and better frameworks for innovation.

Chris addressed a range of urgent policy areas affecting manufacturers. These included concerns about industrial energy costs, which remain around 50 percent higher than in Europe, placing UK firms at a competitive disadvantage. He stressed that sectors such as steel and ceramics act as “canaries in the coal mine” for energy pricing and policy failures, and their challenges could soon impact medtech and wider manufacturing.

Another focal point was skills. The manufacturing sector is grappling with 55,000 unfilled vacancies – an acute issue for medtech companies that rely on technically skilled labour. Apprenticeships in manufacturing have halved since 2017, prompting calls to reform the apprenticeship levy and improve vocational pathways. Make UK is championing efforts like National Manufacturing Day (25 September 2025) to showcase modern careers and reshape outdated perceptions of the industry.

Policy uncertainty remains a major concern. Changes to National Insurance Contributions, inheritance tax, and immigration rules have had unintended negative effects on SMEs. Meanwhile, the Employment Rights Bill, though well-intentioned, could complicate hiring practices, particularly during probationary periods. Chris stressed the importance of nuanced legislation that recognises the manufacturing sector’s strong track record on jobs and conditions.

In terms of performance, manufacturers are seeing weak order books, cautious investment, and falling employment intentions, largely driven by cost pressures and faltering confidence. Nonetheless, there’s cautious optimism. While confidence dipped after the Spring Budget, 63 percent of manufacturers still believe the opportunities ahead outweigh the risks.

For BHTA members, Chris’ presentation underscored both challenge and opportunity. A more strategic national approach to manufacturing could unlock growth, innovation, and export potential for the healthcare and medtech sectors. With policy reviews and industrial strategy announcements on the horizon, Chris encouraged manufacturers to stay engaged and make their voices heard.

On 2 April 2025, the US President, Donald Trump, declared a “national emergency” and introduced wide-ranging tariffs across the world to “strengthen the international economic position of the United States and protect American workers”.

These “reciprocal tariffs” were placed on countries deemed to be giving the US a bad deal on trade, according to President Trump.

Tariffs are taxes charged on the import of goods from foreign countries. They can be used as a source of revenue for governments and to protect domestic industries from foreign competition.

In general, the importer pays the tariff, not the exporter. In the case of the new US tariffs, American companies will pay the tariffs to the US government.

President Trump stated that he has introduced these tariffs to incentivise and re-shore US manufacturing, “address the injustices of global trade”, bolster domestic jobs, and drive economic growth within the US.

What US tariffs have been announced?

A blanket 10% US reciprocal tariff was placed on countries around the world. This blanket tariff came into effect on 5 April 2025. This includes a 10% trade tariff on all imports from the UK.

60 countries faced additional, individualised, and higher reciprocal tariffs. Some of the notable higher tariffs that were set to come into effect on 9 April 2025 included China at 34%, the EU at 20%, and Taiwan at 32%.

On 9 April 2025, President Trump announced a 90-day pause for all of the countries hit by the higher US tariffs – except China. During this paused period, these countries will face the baseline 10% tariff.

China was not exempted from this recent 90-day pause, and a trade war between China and the US has escalated. US tariffs on exports from China now sits at 145%. China’s retaliatory tariff on exports from the US now sits at 84%.

On 1 February 2025, President Trump also announced a 25% tariff on imports from Canada and Mexico with some exemptions.

Effective on 3 April 2025, all foreign-made cars are subject to a 25% tariff. President Trump had also previously announced a 25% tariff on steel, aluminium, and derivative products, which came into effect on 12 March 2025.

UK exports into the US of cars and car parts, as well as steel, aluminium, and derivative products, are subject to these 25% tariffs.

Some goods are exempt from the reciprocal tariffs, including copper, pharmaceuticals, semiconductors, and lumber articles, as well as energy and certain minerals that are not available in the US.

Given these exemptions, BHTA member exports are unlikely to be exempt from the tariffs. 

The impact on UK manufacturers

The situation remains fluid and uncertain and is likely to change over the coming weeks and months.

The tariffs may limit access to the US market for UK firms, as the demand for UK exports may reduce. Restricted market access can hinder growth and expansion opportunities, forcing companies to look for alternative markets or scale down their operations. For SMEs, the additional financial burden will threaten competitiveness, margins, and long-term investments in innovation and R&D.

The supply chain for any components that are sourced from or destined for the US is likely to be disrupted. This disruption can lead to delays and increased operating costs that rely on a seamless flow of goods across the borders.

UK businesses that rely on goods or components from countries and areas that have been affected by higher reciprocal US tariffs could also face increased costs, which will likely affect manufacturing and demand for US goods. 

For BHTA members that are manufacturing overseas and importing to the US from a different country, the tariff applied depends on which country it is exported from. For example, if a UK firm manufactures and exports its products from China to the US, China’s reciprocal US tariff would be applied, not the UK’s. It is not yet clear whether the UK Government will intervene or offer support in such circumstances.

As countries around the world may react, or already have reacted, with retaliatory tariffs, this will also have an impact.

Make UK is advising UK businesses to assess the implications of these global tariffs, both directly and indirectly, and think through new commercial, trading, and financial strategies.

The impact on Northern Ireland businesses

Northern Ireland goods that enter the US are subject to the 10% tariff that the US imposed on the UK.

Although Northern Ireland is part of the UK, under post-Brexit arrangements for trade, Northern Ireland remains in the EU single market for goods. This means that for any retaliatory tariffs that the EU imposes on US imports, Northern Ireland will have to follow those EU rules and introduce those tariffs.

The UK Government is offering a reimbursement scheme to Northern Ireland firms if they can demonstrate that goods imported from the US into Northern Ireland are sold there. However, Northern Ireland firms would first be responsible for paying the EU tariffs before a reimbursement application can be made.

What the UK Government is doing in response to the tariffs 

The UK Government so far has taken a pragmatic response to the US tariffs, without introducing any retaliatory tariffs.

The UK Secretary of State for Business and Trade’s statement to the House of Commons on 3 April stated the government’s intention is to work with the US on a deal that would reverse the locational and product tariffs that have been imposed.

Prime Minister Keir Starmer echoed these sentiments at 10 Downing Street on 3 April, stating that: “Nobody wins in a trade war. That is not in our national interest.”

The Prime Minister said that the government’s intention is to secure a deal with the US but that “nothing is off the table”.

Now, the government is requesting input from UK businesses on the implications for businesses of possible retaliatory action from the UK Government. This is a “formal” and “necessary” step from the UK Government to keep all options on the table.

In the event that the UK Government reaches an economic deal with the US that lifts the tariffs on the UK, the UK Government says it will pause the input from UK businesses, and any measures flowing from that will be lifted.

Beyond the government’s consultation, so far, no other specific support for UK businesses as a result of the tariffs has been announced or provided by the UK Government.

How UK businesses can respond to the tariffs

The UK Government is seeking the views of UK businesses on the implications of possible retaliatory action from the UK Government.

It is a chance for businesses to have their say on the US tariffs and influence the design of any possible UK tariff response if a more favourable deal is not agreed upon.

UK businesses can respond to the UK Government’s request for input here. The request for input from UK stakeholders closes on 11.59pm on 1 May 2025.