In response to sweeping new U.S. import tariffs, the UK government has moved decisively to bolster export credit support. In April 2025, Britain announced an additional £20 billion in export finance backing, lifting the maximum capacity of UK Export Finance (UKEF) to £80 billion, with a specific £10 billion earmarked for sectors hardest hit by American levies (steel, aluminium, autos). Parallel to that, the government also suspended import duties on 89 product categories for two years to relieve domestic cost pressure.

For trade finance markets, this injection of liquidity is a signal. It reassures exporters, especially small and medium enterprises (SMEs), that liquidity support is available, reducing the risk premium in bilateral deals. In sectors directly affected by U.S. tariffs, the additional UKEF backing can mean lower interest rates, enhanced guarantee support, or more aggressive cover for political or commercial risk.

Critically, the allocation of funds is not abstract: businesses exporting into U.S. markets can now access loans up to £2 million under preferential terms. This move helps firms manage cash flow during tariff volatility and preserves competitiveness in U.S. supply chains (where long payment cycles and credit risk had already strained exporters). By underwriting more deals, UKEF effectively shares credit risk, allowing commercial banks to take on business they otherwise might have declined.

However, such state support must be carefully managed. There is risk of crowding out private capital if UKEF becomes the principal financier in certain sectors. Moreover, tighter WTO or trade law scrutiny could emerge if such support is perceived as unfair subsidy. Exporters and banks must remain compliant with rules on state aid and ensure that UKEF usage adheres to WTO consistency.

Longer term, this shift also encourages exporters to re-engineer supply chains: firms may choose UKEF-eligible routes or markets, aligning with government priorities. For the trade finance community, it brings renewed emphasis on origination, credit underwriting, and risk sharing schemes involving public and private sectors working in tandem.

Further information: https://www.gov.uk/government/news/government-steps-in-to-back-british-business-in-changing-world

This article represents the views of the author and not necessarily those of ICC.