Impact on the UK 

The UK has been hit with a 10% tariff on all its exports to the US. This baseline tariff affects a wide range of products, increasing costs for UK exporters and potentially reducing their competitiveness in the US market. 

Additionally, a separate 25% tariff on all imported cars was announced just before “Liberation Day.” This specifically targets one of the UK’s most significant export sectors. The tariff is expected to severely impact UK car manufacturers like Jaguar Land Rover, Aston Martin, and Rolls-Royce, as the US is their largest single export market. The increased costs could reduce demand for UK cars in the US, further straining the industry, which already faces challenges from global competition and domestic market conditions.

Furthermore, the US has reinstated a 25% tariff on steel imports and increased tariffs on aluminium imports to 25%. These measures aim to “protect US domestic industries” but have significant implications for UK exporters of these metals. The tariffs are expected to increase costs for UK steel and aluminium products in the US market, potentially reducing competitiveness and sales. 

There are also concerns about potential tariffs on medical supplies and pharmaceuticals. While these tariffs have not yet been implemented, the Trump administration has indicated plans to impose significant tariffs on pharmaceutical imports. This could disrupt the supply of medicines and medical devices to the US, increasing costs and potentially leading to shortages there.

Global Impact 

On 9 April, President Trump announced a 90-day pause on tariffs for most trading partners, which has temporarily alleviated some of the immediate pressures on global trade. While most countries are still faced with a 10% baseline tariff, the pause provides a brief respite, but the long-term impacts remain uncertain as countries navigate these changes. 

The broader implications of these tariffs include increased costs for consumers, disruptions in global supply chains, and heightened economic uncertainty. Companies worldwide are reassessing their strategies.

FAQ 

Is the 90-day pause on tariffs applicable to all products and countries? 
While President Trump announced a 90-day pause on tariffs for most trading partners on 9 April, most countries still face a 10% baseline tariff on their goods exports to the US, including the UK. Additionally, the tariffs on cars (25%), steel (25%), and aluminium (25%) remain in effect and are not affected by the pause. These specific tariffs continue to impact industries significantly, particularly in countries like the UK, where car manufacturing and metal exports are major sectors. 

How has the tariff percentage formulation been calculated?
The US Administration has said the tariff percentage for each country has been calculated based on the surplus/deficit of trade with a specific country (or block such as the EU), currency manipulation, trade barriers and economic subsidies that strongly favour domestic producers.

 
Why does the UK have a 10% tariff?
Even countries that import more from the US than they export have been given a minimum tariff of 10%. Given that there is a trade surplus between the US and UK, with no mention of currency manipulation, trade barriers, or industries' subsidies, the UK is allocated the minimum 10% tariff.

 
What exactly is a tariff?  
The tax paid to the country's government imposes them on goods and services imported into their country. In this context, applicable products made in the UK are subjected to a 10% tax when they enter the US. The importer typically pays a tariff, although a specific arrangement can be applied between the buyer (importer) and seller (exporter). 

I have heard that small e-commerce parcels will also be charged duty. Is that true? Currently, they are not, provided they are under $800 in value. Only parcels from China and Hong Kong will be levied duty. 

I am an exporter, and I am now facing 10% tariffs on my exports into the US. What should I do? 
Review your prices in comparison to those of your competitors. Many consumers are currently feeling financial pressure due to tariffs. Entrepreneurs often hesitate to raise their prices and try to absorb the additional costs instead, which can be a trap. If your market can support it, consider increasing your prices. 

I export from the UK straight to my end customers in the US. Should I respond to the tariffs by setting up a subsidiary in the US? Will this save me money? 
Considering the additional costs, complexity, and management time involved, only pursue this option if your business has a significant scale and a realistic opportunity to add value in the US. For most companies with exports to the US under £2 million, it may not be worthwhile. However, it’s a good idea to do the calculations regardless. Keep in mind that shipping components rather than finished products will incur import duties. Furthermore, the duties could be even higher if any of those components are sourced from China. 

Is it still worth exporting to the US? 
In comparison, a 10% tariff is not excessively high, and we are in a strong position compared to many other countries. At current exchange rates, the prices for many items in the US are either comparable to or even higher than those in the UK. The US market is still significant and is not going anywhere. If possible, you should consider exporting; it will strengthen both you and your business.