Firms hit as banana war sours Anglo-US relations

SOME INDUSTRIES will be hit hard by the proposed 100 per cent duty to be levied on their goods imported into the US, writes Hester Lacey.

Jeff Gutteridge is finance director of Clan Douglas, a Scottish knitwear firm in Hawick that exports 90 per cent of its products to the US. "Our products are delivered duty-paid so we have to absorb any increase," he says. The firm could not afford such huge costs.

Clan Douglas employs 112 people, more in the summer when garments are made up, and the industry employs 4,000. "There are 30 or 40 Borders firms that export some part of their output to the States," he says. "We would be an immediate casualty, for others the effects might be more lingering." The trade being seasonal, one disaster could finish a company.

The industry is, he says, encouraged by Tony Blair's comments last Thursday, and also by support from other politicians. "We are at least optimistic that the situation is now ... being taken seriously."

In the candle trade, 20 per cent of British manufacture goes to the US. Ian Barnet, owner of Shearer Candles in Glasgow, sends a third of his annual turnover - worth pounds 500,000. He employs 30 to 40 people, the total varying seasonally.

"If this goes ahead it's inevitable that if we employed an average of 40 people last year we will employ two-thirds of that number this year," he says.

For him, uncertainty is the worst aspect. "While this drifts, we can't ship our orders and our customers will find new suppliers. Then we'll have to start again."

He is also critical of the confusion over whether the Government is prepared to underwrite costs for all businesses affected, or just the cashmere industry, which is the hardest hit.

Walkers Shortbread, the world's leading shortbread manufacturer, employs around 700 people in the village of Aberlour, Grampian. About 45 per cent of its output is exported to 50 countries with the US being an "important market". Walkers says the situation is "worrying", but awaits further information.

Others will be less hard-hit. Most British batteries sold in the US are manufactured out there and the proportion that will be liable to tariffs is small.

THE HIT LIST

Value of goods exported to US in pounds m

Cashmere sweaters 17.71

Batteries 13.78

Plastics 10.13

Biscuits 9.19

Bath oils 7.29

Candles 2.54

Lithographs 2.20

Bed linen 1.48

Coffee makers 0.37

Wallets 0.13

Handbags 0.09

Cheese 0.03