Donald Trump’s threatened tariffs could hit UK trade with the US as badly as Brexit affected trade with the EU, a leading thinktank has said.

In a report published today, the Resolution Foundation said British trade since Brexit had been “a tale of two sectors”, with service exports growing strongly but goods exports stagnating.

But authors Emily Fry and Sophie Hale warned that British firms faced another major trade shock if the incoming US president implemented his threat to impose tariffs on all imports.

Ms Fry said: “Brexit has driven a trade divide between Britain’s struggling goods sectors and its powerhouse services industries.

“Firms working in areas like advertising, IT and consultancies have found it easier to work around Brexit than goods exporters who can’t avoid transport costs and border checks.

“And with the dust still settling on how Brexit has changed how firms trade, the threat of universal tariffs on goods by President-elect Trump risks widening this trade divide further.”

The report found that physical trade barriers such as the customs border had meant goods exports have grown by only 0.3% per year since 2019, well below the Organisation for Economic Co-operation and Development (OECD) average of 4.2%.

But services, which are less affected by physical barriers, have grown by 7.5%, above the OECD average of 6.1%.

Mr Trump has vowed to introduce a range of tariffs during his second term in the White House, including a 10-20% levy on all goods imports, with higher tariffs on goods from China, Mexico, Canada and nations that retaliate with protective measures of their own.