Facing mounting U.S. tariffs, British retailers are swiftly recalibrating their global export strategies. New research by ESW highlights the urgency with which companies across multiple consumer sectors are seeking markets beyond their traditional reliance on the United States.
Reducing Dependency Amid Rising Tariffs
Facing persistent uncertainty from Washington’s tariff policies, more than two-thirds of U.K. exporters are actively pursuing market diversification strategies to reduce reliance on the United States, according to research by e-commerce firm ESW and Retail Economics. This strategic pivot reflects a notable shift in trade behavior, particularly among Britain’s larger retail enterprises.
Researchers warn that if tariffs climb toward 24%, trade with the U.S. would become financially unsustainable for most major U.K. retailers. Such a scenario has retailers re-evaluating their exposure. Already, significant sectors are trimming reliance on U.S. sales, including 20% of apparel and footwear companies, and 15% each from consumer electronics and home goods.
To manage the short-term financial strain, retailers are making tough decisions. Nearly three in ten consumer electronics firms are passing tariff costs onto customers. Similarly, 15% of apparel brands, 19% of home goods companies, and 16% of beauty and lifestyle retailers have opted for price hikes, balancing competitive risk against immediate margin erosion.
High-Growth Markets Take Priority
As uncertainty around U.S. trade deepens, nearly eight in ten British retailers surveyed by ESW and Retail Economics see expanding global brand visibility as mission-critical. Companies express willingness to accept thinner margins in the near-term if doing so accelerates their growth abroad. That shift is placing previously secondary markets into strategic prominence, particularly the Middle East, Asia-Pacific, and Western Europe beyond the EU.
The shift toward these new growth frontiers is already yielding tangible results. From 2021 to 2024, retail exports from Britain surged dramatically to the United Arab Emirates (up 84%), India (up 70%), Norway (up 52%), and Turkey (up 31%), significantly outpacing the 20% increase to the United States. These figures demonstrate an accelerated embrace of previously undervalued markets and a determined reshaping of retail export pathways in response to geopolitical risk.
The Hidden Cost of Rapid Export Diversification
While market diversification offers a clear path to mitigate tariff-induced vulnerabilities, retailers may be underestimating hidden complexities. Real-world experience from recent trade disruptions, such as the EU-UK post-Brexit adjustment, highlights that successful market shifts require more than simply redirecting exports. They demand rigorous recalibration of supply chains, logistics strategies, consumer engagement models, and compliance frameworks. As British retailers charge into new geographies to sidestep U.S. tariffs, careful execution and nuanced market understanding, not just speed, will ultimately separate those who thrive from those who merely react.