Business Briefing: Navigating The New US-UK Trade Tariffs

The Trump administration has introduced sweeping tariffs on goods imported into the United States. This move is expected to cause significant disruption to global trade, with notable consequences for UK businesses. 

As the ripple effects unfold, understanding the scope of the tariffs and how to respond strategically will be crucial for UK businesses looking to protect their margins, adapt their operations, and plan confidently for the future.

What is the US tariff?

Tariffs will vary depending on the country of origin.

A baseline 10% tariff will apply to all goods imported into the US originating from the UK, on top of existing US duties, fees and taxes on such imports. Goods originating from the EU will be subject to a 20% tariff. The tariffs will not apply to:

• copper, pharmaceuticals, semiconductors and lumber
• energy, energy products and other minerals not available in the US

In addition, a separate 25% tariff has been imposed on all foreign-manufactured automobiles entering the US market, regardless of origin.

When will the tariff come into force?

The 25% tariff on foreign-made automobiles is already in effect.

All other tariffs, including those on UK and EU goods, will come into force on 5 April 2025.

What are the UK and the EU doing in response?

The new tariffs have raised concerns about a prolonged trade war, as key trading partners consider retaliatory measures.

Canada responded to earlier US tariffs with swift reciprocal action, and the EU is reportedly preparing its own response. Having already imposed duties on American goods following US steel and aluminium tariffs earlier this year, the EU is expected to adopt a firm but targeted approach, focusing on politically and economically significant US exports.

In contrast, the UK's initial response has been more restrained, with the government signalling a preference for a diplomatic resolution to protect the broader US-UK relationship. However, signs of potential retaliation remain. The government has invited UK businesses to submit their views by 2 May 2025 on how the UK should respond, and has published an indicative list of US imports that could be subject to future tariffs, indicating that retaliatory action remains under active consideration. 

What are the implications for UK businesses?

There is little doubt that these tariffs will be disruptive for UK businesses, with the potential to inflict significant economic damage.

In the short term, goods originating in the UK will become more expensive for US consumers, likely dampening demand and squeezing profit margins. UK firms with operations or supply chains in the EU face an even steeper challenge, given the higher tariffs imposed on goods originating in the EU.

More broadly, the measures risk unsettling global trade, fuelling inflation and increasing the likelihood of economic slowdown or recession. For UK businesses already navigating fragile domestic conditions and tightening financial pressures, the added uncertainty and cost burden come at a particularly difficult time.   UK businesses will need to strategically consider pricing, sourcing and market diversification to navigate the complexities of the tariff changes.

How RPC can help

In these uncertain times, we’re here to help your business navigate whatever challenges come your way.

With deep expertise across the commercial, retail, tax and regulatory landscape, we provide clear, practical guidance—no matter the scale or complexity of the issue. You can count on us to be a safe pair of hands. Please contact Michelle Sloane or Liam McKay if you would like to discuss.