- One method for companies to mitigate the impact of Trump’s sweeping global tariffs would be to build more products in the US
- 20 FTSE 100 companies already have more than 20% of their facilities in the US, according to AJ Bell analysis of Bloomberg data
- Ashtead tops the list for the percentage of facilities it has in the US, as well as for the percentage of its sales Stateside
- Melrose is another company with a significant sales presence across the pond, with almost two-thirds (64%) of its sales in the US, and has just opened a multi-million dollar factory in San Diego meaning it now has 29% of facilities housed there
“Donald Trump is playing a hard game with sweeping tariffs,” says Dan Coatsworth, investment analyst at AJ Bell.
“UK companies selling into the US could see a slowdown in sales if US customers deem goods too expensive under the new tariff regime. It means companies need to assess all their options to keep their engines ticking over smoothly and not spluttering.
“One way for UK companies to get around tariffs is to build more products in the US. Investing in factories or offices creates jobs for Americans and could bring significant investment to industrial heartlands, something that would please Trump no end.
“There are plenty of foreign companies already spending big bucks in the country and that trend could now accelerate. For example, Taiwan Semiconductor Manufacturing Company (TSMC) is investing $100 billion in production and research facilities in Arizona. While Danish toy brick giant Lego is spending $1 billion on a new manufacturing plan in Virginia.
“It’s not a decision that is made lightly, but investing in US facilities could now be at the top of the boardroom agenda for many UK companies too.
“Plenty of UK companies have already planted flags Stateside. There are 20 companies in the FTSE 100 index with more than 20% of their facilities in the US, according to AJ Bell analysis of Bloomberg data.
“This suggests that markets might have overexaggerated the tariff hit to certain stocks. If a big chunk of goods are made and sold on US soil by UK companies, there are no tariffs to pay.
“The fact many UK companies are already in the States is important on another level. Having an existing presence makes it easier to press the button on adding more, rather than starting from scratch in the country.
“BAE Systems is one of the biggest FTSE 100 players in the US with 59% of facilities Stateside. BAE’s US operations include making armoured vehicles, ship repair and supplying explosive materials to the US Department of Defense.
“Approximately two thirds of Melrose’s sales come from America and 29% of its facilities are in the country. Last December Melrose-owned GKN Aerospace opened a $55 million repair facility for aero-engine components in San Diego, which was a major financial commitment. It doubles the company’s maintenance, repair and overhaul capacity in the region.
“British pharmaceutical group AstraZeneca last November announced plans to invest $3.5 billion in research, development and manufacturing in parts of America by the end of 2026. It had also been planning to spend £450 million on a vaccine plant in the UK but scrapped the investment a few months ago after saying Labour failed to match the previous government’s offer of support.
“Interestingly, pharmaceuticals are exempt from Trump’s new US import tariffs, which means the pressure is off British firms AstraZeneca and GSK to spread their wings further in the US. That might change as there are market fears that pharma’s tariff exception is only temporary. Both FTSE 100 companies already have a decent sized presence in the States: GSK has a quarter of its facilities in this country and AstraZeneca has just over one fifth of its facilities housed there.”
