The latest US tariffs announcement marks a significant shift in trade policy, with new measures set to impact a range of imported goods. These changes could have wide-reaching implications for businesses across multiple industries, particularly those with global supply chains or US market exposure. General and Sector-specific commentary is available to help you understand how these tariffs may affect your operations and strategic planning going forward.
List of Countries Hit by US Tariffs
Donald Trump announced a 90-day pause on tariffs – 10/04/2025
Click here to preview top influential countries
| Country | Previous Share | New Tariff |
| European Union | 18.5% | 20% |
| China | 13.4% | 125% |
| Japan | 4.5% | 24% |
| Vietnam | 4.2% | 46% |
| Falkland Islands | – | 42% |
| South Korea | 4% | 26% |
| Taiwan | 3.6% | 32% |
| India | 2.7% | 27% |
| UK | 2.1% | 10% |
| Switzerland | 1.9% | 32% |
| Thailand | 1.9% | 37% |
| Malaysia | 1.6% | 24% |
| Brazil | 13.4% | 10% |
| Singapore | 4.5% | 10% |
| Australia | <1% | 10% |
| Bosnia & Herzegovina | <1% | 36% |
| Serbia | <1% | 38% |
| South Africa | <1% | 31% |
The rates listed are not guaranteed and are subject to change.
Key Summary:
Don’t panic and don’t start spending lots of time and money on consultants’ fees or looking to change business models when there is still this background of frequent announcements and change.
Short term actions
– Ensure you understand all your incoterms on key contracts, who is importer of record and therefore affected by the tariff/duty increases.
– Where you are importer of record, ensure you are comfortable with what is in your customs declarations; for example, are your classifications correct so that you are paying the right duty rates
– If goods for Canada, Mexico, other international markets are distributed via US warehouses, then ensure you have a bonded warehouse set up to claim duty relief.
– Consider if there are any commercial justifications for using a different lower transaction value. Switching to a First Sale model is not as straightforward as simply using a factory price since there are dutiable assists that will need to be considered.
– For retailers selling Chinese origin goods, and particularly therefore apparel retailers, you should assess impact of the removal of the $800 low value relief threshold and the eye wateringly high tariffs now introduced when importing Chinese products into the US.
– Transfer Pricing headache – a higher customs tariff should in turn lead to lower assessable profits for US corporate tax purposes but if an entity is treated as a low risk distributor in the US and is assessed to corporate tax on a target operating margin, the parent company or entrepreneur entity in the Group should under this TP model support the US entity up to the target margin. Could the tax deductibility of these support payments be successfully challenged by Tax Authorities leading to a higher overall global effective corporate tax rate as well as the increased customs tariffs payable. TP policies should therefore be revisited.
– When pricing intercompany transactions, ensure that any transaction value for duty purposes only includes product related costs. Are there elements that can be stripped out that are potentially non-dutiable (e.g. management services).
– Join a relevant Trade Association and lobby!
Longer term actions
– Consider whether there can be any changes to incoterms and supply agreements to share or shift the burden of tariffs.
– Can you make changes to where your purchase goods from to reduce applicable tariffs?
– Can any of your products be manufactured using “US content” as this could reduce the tariff burden?
– Can a different distribution model be adopted and how easily, especially for imports into Canada and Mexico for example?
– Monitor other countries actions in response to the US announcements as any retaliatory actions could of course also impact your supply chain.
– Watch this space especially as you plan and make changes to operating models – tariffs currently affect goods but there is concern that they could be applied to services as well. The EU are considering this possibility too.
If you would like a one to one session to discuss your particular facts and circumstances and how your Group may be impacted, please contact Emma McCartney for more information or your usual Menzies contact.
US Tariffs General Commentary
Sean Turner, VAT Director, comments:
How is trading with the US changing?
In the wake of additional tariffs levied on certain goods by the Trump administration, now is the time for businesses to review customs data and supply chains and investigate available trade agreements and reliefs. It should also be ensured that any transfer pricing agreements in place are robust.
It is important to keep updated on what is actually known and what rates currently apply, as the landscape is continually changing. Exporters, importers and customs brokers will need to be aware of the correct tariff rates to apply to products and how to declare these.
What is known?
- Effective 5 April, a basic 10% rate applies to UK products entering the US
- Where the goods are already subject to duty, the 10% is in addition to the applicable rate
- Additional rates are effective 9 April
- Steel, aluminium, cars and car parts are subject to an additional 25%.
- There is a list of items that are exempt from a tariff increase
- There are exemptions for goods with 20% or more US content
- EU goods will be subject to a 20% rate, Japanese goods 24% and Chinese goods 125%
- The EU is considering retaliatory tariffs on a range of US goods, for example, motorcycles
- China is considering retaliatory tariffs of 84% on US imports
- Australia does not appear to be considering retaliatory tariffs and has a plan to invest money in sectors affected by the US tariffs
Origin will become very important and in particular, proving origin. Goods may be subject to Customs Border Protection (CBP) checks, on arrival in the US.
Businesses must examine contracts already in place with US buyers, especially the agreed incoterms, which may affect pricing going forward.
Business should explore the possibility of using any applicable customs reliefs, such as warehousing and whether duty drawback applies, where there would be a refund of duty, if goods imported are re-exported at a later date, or used in the production of other goods for export.
There has been talk of using the UK as a manufacturing hub for the EU, due to it having a lower rate, or using Northern Ireland to facilitate exports, however, care must be taken over whether this can actually apply and origin must always be considered.
Saumyanil Deb, Director, comments:
Tariffs disrupt transfer pricing strategy
- Many transfer pricing policies for tangible goods transactions are embedded with services or intangibles elements in them. Although it is always advised not to have embedded pricing for any related party transactions, it is now more critical to decouple tangible goods transactions from services and intangibles, and treat them separately.
- Tariff would impact the cost of goods sold (COGS) and the allocation of this impact will depend on allocation of risks and relative bargaining power of the related parties. This requires bespoke analysis to factor in varying conditions of related parties, industries and macroeconomies.
- The existing transfer pricing benchmarking and economic analyses should be revisited to see if the comparables accepted or methodology adopted previously are still valid.
- A revisit of existing transfer pricing policy, intercompany agreements or economic analysis require a two-sided analysis (i.e. not just from a US perspective).
- Retrospective adjustment of transfer prices to reflect tariff costs may create customs compliance risks. Businesses must be mindful of the interaction between transfer pricing policies and customs valuation rules to avoid audit risks and penalties.
- A crucial implication of tariff on intercompany transactions would be changes in supply chain and customs valuation. Any changes to customs valuation approach should be synced with the TP policy.
- Tariff related adjustments could lead to increasing level of enquiry from HMRC and could raise potential double taxation issues. MAP would be a reasonable and preferred route to mitigate this. We also expect increasing volume of APAs for tax certainty on related party transactions that are impacted by tariffs.
Biane Aliyar, Senior Technical Manager, comments:
Tariffs – UK financial reporting considerations
In light of the recently imposed global tariffs and increases to existing tariffs, many companies are faced with additional challenges and uncertainty. UK businesses that export to the US are likely to experience increased costs as well as potential decline in demand for UK goods. Those organisations relying on materials from countries affected by these tariff increases may face cost increases and potential disruptions to their supply chains. These evolving complexities could lead to a number of financial reporting implications.
It will be important for businesses to carefully consider the following issues:
- The extent to which demand for the company’s goods may be affected and how this may impact forecast cash flows and operating results.
- The companys exposure to currency fluctuations, particularly movements in the value of Sterling relative to the US Dollar.
- The impact of supply chain disruptions and increased input costs on profitability and cash flow.
- Whether increased costs and reduced demand for products could lead to potential indicators of impairment of assets.
In a lot of cases those businesses expecting to be impacted should consider revisiting initial going concern assessments, based on budgets and forecasts that are not reflective of current events and conditions.
Greg Huitson-Little, Forensic Partner, comments:
Beware the contract risks: litigate or negotiate?
A change in global trading relationships triggered by the new tariff regime could open the door to a whole host of legal and contractual issues. We’ve already seen the headlines of Jaguar Land Rover pausing shipments into the US; Audi has followed suit, and other manufacturers may do so to. In the US, Musk and Navarro have been engaged in a rather bitter exchange of words as to just where Tesla sources its components and how much comes from overseas. And today’s accusations of insider trading and an ill-timed post from the President on his social media platform saying “This is a great time to buy” shortly before the announcement of the 90 day pause will surely pique the interest of regulators.
The UK may have escaped the very worst of the tariffs and chaos, but the risks are clear. Up and down the supply chain, businesses rely on contractual and commercial relationships for smooth operations. Now, businesses across the globe will be looking carefully at contracts and reevaluating their positions. Businesses may be tempted to restrict supply to the US, cancel orders, source components from elsewhere, revise pricing, or break contractual provisions which have become onerous. Businesses may look to innovative manufacturing or assembly locations and amending their supply chains and to minimise tariffs. We may even see some businesses invoking force majeure clauses to renegotiate or terminate contracts.
Being able to react and change quickly will be valuable in a rapidly changing environment. But whatever businesses decide to do, it will be important to get the appropriate legal and financial advice to make informed decisions, and weigh up the risks of litigation or non-compliance. Likewise, businesses at the receiving end of potential contractual breaches or unexpected changes in relationships will need to think carefully as to how they react: litigate or negotiate? Whichever side of the fence a business sits on, get it wrong and the risks of litigation or non-compliance could be very significant indeed.
Sector Commentary
The recent global tariffs imposed by Donald Trump have meant that the transport and logistics sector face additional challenges. Although the UK was hit with the lowest rate of the targeted countries at 10% (and 25% on specific goods), the cumulative effects of these global tariffs will be profound. With many companies having to make immediate changes to their operations and overall strategy, it is clear to see the impact this has already caused.
The tariffs on UK exports to the US has led to increased costs for transporting goods across the Atlantic. The costs may be borne by different parties depending on the commercial arrangements, with exporters potentially absorbing some or all of them to maintain their competitiveness in the US market. Those companies who wish to pass on the cost to another business in the chain may need to review their contracts in order to do so, which will in many cases require legal assistance to determine the feasibility of such amendments.
Established supply chains have become disrupted, leading to long standing routes requiring amendments with additional time costs spent on logistical planning. This may lead to delays as companies navigate the increased uncertainty and will naturally impact those entities that run a just-in-time model more profoundly.
The Office for National Statistics reports that the UK exports goods and services worth £46.2bn to the US, making them the UK’s single largest trading partner. With the potential for the UK to consider any retaliatory measures, this could add additional layers of complexity to the situation, further impacting the issues mentioned above.
In summary, the UK transport and logistics sector is at the beginning of navigating a fast-changing landscape and will require strategic realignment in response to the recent US tariffs imposed. It is not yet clear who and how these increased costs will be borne, and it certainly won’t be a ‘one size fits all’ approach. Although the sector has had its fair share of economic challenges over the years, it is evident from the initial reaction as to the scale of this latest hurdle for the industry.
US tariff on China
The latest amendment from Donald Trump of a 125% tariff on select Chinese goods, alongside a 10% global tariff freeze, presents both challenges and opportunities for the UK transport and logistics sector. Whilst currently it seems impossible for companies to plan due to continual changes being made, it does highlight the need for an agile supply chain strategy. With China introducing a retaliatory tariff on US imports of 125%, it could be a while until a sense of trade calmness between the two nations is restored.
Challenges
The extreme levy on Chinese imports will, at least in the short term, lead to a substantial decline in transatlantic shipping volumes involving Chinese-origin goods, reducing freight demand for UK-based firms indirectly engaged in US/China trade.
UK logistics providers may experience a downturn at major ports and a shift in customer sourcing behaviour, increasing uncertainty and cost pressures across the supply chain. Additionally, restructured global supply chains could bypass the UK entirely, particularly as firms seek direct routes from alternative Asian markets.
Opportunities
The tariff imbalance may accelerate global diversification of sourcing. Countries such as Vietnam, India, Malaysia and Eastern Europe are all currently more viable options, although it heavily depends on the availability of goods from these markets.
UK freight forwarders and customs brokers could benefit from increased demand for consultancy services, such as tariff mitigation strategies and origin planning.
There may also be greater demand for flexible warehousing, bonded facilities, and multi-modal solutions as businesses will look to reroute goods. Storage of goods in bonded warehouses will enable companies to delay duty payments until these are either sold or dispatched, with companies such as Clipper Logistics expanding their offering here to facilitate the demand.
The 10% freeze globally could stabilise trade with key European and Commonwealth markets, giving UK logistics providers a degree of certainty in regional operations. With it being a temporary measure, businesses will be keeping a close eye on what follows.
Donald Trump’s tariffs, particularly those imposed on goods from China and other countries, will have a notable impact on global trade, including the UK’s retail sector. Here’s how they could influence the UK retail sector:
1. Increased import costs:
- Higher product prices: Many UK retailers rely on imports from countries affected by tariffs, particularly China. These tariffs could lead to higher costs for raw materials, manufactured goods, and finished products. As a result, UK retailers may face increased costs, which often trickled down to consumers in the form of higher prices.
- Impact on retailers with Asian imports: Retailers that rely heavily on Chinese, Taiwanese, Vietnamese, and other Asian imports (such as electronics, clothing, toys, and furniture) may likely see a rise in costs. This may force them to either absorb the additional costs or pass them on to consumers, potentially reducing sales or eroding profit margins.
2. Supply chain disruptions:
- Delays and uncertainty: Trump’s tariffs will introduce unpredictability into the supply chain. Retailers may have to adjust to changing trade conditions, which could lead to delays and increased costs in sourcing products. This may be particularly disruptive for retailers operating on thin margins or those that depended on just-in-time inventory systems.
- Diversification of suppliers: To mitigate the risk, UK retailers could look to diversify their supply chains by sourcing products from countries that were not subject to high tariffs or even shifting production back to the UK. However, this often led to higher costs and logistical challenges.
3. Currency fluctuations:
- Sterling-Dollar volatility: The imposition of tariffs will likely also affected global currency markets. The value of the British pound against the US dollar has fallen as a result of trade tensions, which mean that UK retailers dealing in USD-based goods or trading with American companies could face additional costs due to currency shifts.
4. Impact on consumer behaviour:
- Reduced spending: If there is an increase in retail prices due to tariffs, along with the economic uncertainty surrounding trade relations, this may lead some UK consumers to tighten their spending. With higher prices for imported goods, shoppers may have turned to more affordable alternatives or cut back on discretionary spending.
- Shift toward domestic goods: In some cases, UK retailers may wish to promote locally produced goods as alternatives to more expensive imports. This shift may help domestic suppliers, but it also limited the variety of products available to consumers.
5. Sector-specific impacts:
- Apparel and technology: Specific sectors, like fashion and electronics, will likely be particularly hard-hit. Fashion retailers that rely on cheap imports from Asia will likely face increased costs, while tech companies selling products like smartphones and laptops will likely see higher prices passed onto consumers due to tariffs on Asian goods.
- Luxury goods and automobiles: Luxury retailers and those in the automotive sector will also feel the impact. For example, UK luxury goods retailers selling items from US or Asian manufacturers will have to deal with higher prices due to tariff impositions.
6. Long-term impact:
- While the immediate impact of Trump’s tariffs will be felt through rising costs and uncertainty, some UK businesses may be able to adapt by finding alternative suppliers, negotiating better deals, or innovating within their own supply chains. However, the tariffs may contribute to the broader trend of protectionism, which my make long-term global trade relationships more complicated.
In summary, Trump’s tariffs will create a challenging environment for UK retailers, increasing costs, creating supply chain disruptions, and affecting consumer spending. The impact will be strongly felt by businesses with heavy reliance on imports from countries subject to tariffs, and they will have to adapt by diversifying suppliers, raising prices, or finding ways to mitigate the effects on their bottom lines.
Donald Trump’s newly introduced tariffs on imported goods are among the most aggressive in recent history and will have far-reaching consequences for manufacturing globally. The industry relies on the ability to source and move goods across borders, with quality manufacturing being dependent on access to the best products, as opposed to the nearest available. It has been widely reported that the 10% baseline tariff on UK goods exported to the US could reduce demand for British products, leading to an estimated £22 billion economic loss over the next two years and predicted to shave 0.8% off the UK’s GDP.
Whilst it is expected that all UK exporters will need to impose price increases on American customers to cover the tariffs, the UK’s rate of 10% is low relative to the EU (20%) and China (125%), presenting an opportunity to increase market share relative to other global competitors for goods that cannot quickly or easily be produced within the US. Those operating in highly specialised or capital intensive sub-sectors may benefit from a reduction in competitive pressure, but will nonetheless be forced to impose steep price increases, meaning that customers importing into the US are incentivised to reduce any non-essential spending overseas, including from the UK.
Manufacturers of premium food and drink and luxury goods may be somewhat shielded from a reduction in demand, where products cannot be easily substituted within the US and customer demographics are less price-sensitive. Product differentiation and brand strength will be key to maintaining profitable access to the US market.
An increased tariff rate of 25% to be levied on cars and automotive parts exported to the US is predicted to destabilise the UK car manufacturing industry, potentially putting 25,000 jobs at risk. Whilst the vulnerability of iconic brands such as Jaguar, Land Rover and Mini has been widely reported, there will be a knock-on impact to all manufacturers operating as part of a supply chain within this sector.
In assessing the risks and opportunities associated with the new tariffs, UK manufacturers must be particularly wary of the Rules of Origin criteria, which may result in additional tariffs being applied to goods manufactured in the UK, where components used in the manufacturing process have been sourced from other countries potentially subject to a higher tariff rate. Understanding your supply chain and maintaining transparency as to the origin of components and the nature of manufacturing processes will serve as important safeguards against unexpected costs.
As always, manufacturing businesses able to respond with agility to market changes will be best placed to minimise the impact of tariffs on profit margins. The volatility in global markets brought about by the tariffs will inevitably bring about opportunities for those who can consistently deliver goods to the required specification, navigating any additional administrative burden whilst offering a seamless purchasing experience for customers.
To capitalise on this opportunity, manufacturers should focus on innovation and quality to differentiate their products in the competitive US market and to develop systems for the timely movement of goods across borders, regardless of tariffs. Highlighting the cost benefits and quality of UK products could attract more US buyers and build brand loyalty – an investment worth making now in cross-border partnerships that have the potential to endure beyond Trump’s term in office.
The recent tariffs imposed by President Trump have had a mixed impact on UK tech businesses. Here are some key points:
Positive Impacts
- Service industry: Around 78% of the UK Tech industry is software, consultancy or service based, and therefore avoid the direct impact of tariffs being implemented
- Competitive advantage: Compared to the 20% tariffs imposed on most European countries, UK businesses might find themselves in a better position to increase their product sales in the US
- Adaptation: Some firms are seeking alternative suppliers or absorbing the costs to mitigate the impact
- Funding: Whilst the future of funding for tech growth is unknown, if the market looks favourably on the UK against its US counterparts (currently the biggest market), this could be an opportunity for investment. We may need to consider any devaluation of USD, but investors will always want to back future high growth opportunities.
Negative impacts
- Increased costs: The 10% tariffs on UK products exported to the US have led to higher costs for consumers, potentially reducing demand for UK tech products
- Uncertainty: The unpredictability surrounding these tariffs has caused some businesses to scale back their growth plans, especially those involving the US market
- Supply chain disruptions: Companies sourcing components from China and exporting to the US are facing significant challenges, leading to reduced margins and loss of export business
- Potential oversupply from China: With the US tariffs being placed on China, the impact may be wide spread where China looks to flood the market with excess capacity. Potentially good for consumers, but challenging for UK business.
Overall, while the tariffs have created challenges, some UK tech businesses are finding ways to adapt and even benefit from the situation.