Trump Tariffs

The impact on supply chains and commercial decision-making.

This rolling article provides updates on the latest developments regarding Trump’s tariffs and their impacts. Here at Price Bailey, we strive to keep you informed with the most current insights and analyses. However, due to the dynamic nature of this topic, some updates may be delayed, and this article should be taken as general comment rather than advice.

For comprehensive advice or specific enquiries and support, please reach out to Greg Mayne, our VAT Partner and expert. Check back regularly for the latest updates…

14 April 2025

Over the last week, President Trump has still been active in adjusting trade policies. Here are some observations:

Trump’s administration has exempted mobile phones, computers, and other electronic devices from the new tariffs. This exemption aims to mitigate the impact on tech companies and consumers, particularly those relying on products manufactured in China.
Trump has announced a complete three-month pause on all the “reciprocal” tariffs, apart from China. All other countries that were subjected to reciprocal tariff rates will see rates go back down to the universal 10% rate.
The US tariff rate on most Chinese imports now amounts to 145%, Trump announced a new levy of 125% on goods from China on Wednesday, but the White House has since clarified that rate is on top of an already existing tariff of 20%. China have also raised additional duties on U.S. goods to 125%.

2 April 2025

Trump’s tariffs versus Reeves’ restoration of UK headroom

On the 2 April 2025, Trump announced sweeping new duties on all U.S. trade partners, including a baseline 10% duty on imports from 60 nations. This move was part of his “Liberation Day” initiative, aimed at reversing longstanding trade deficits. Following the Chancellor of the Exchequer, Rachel Reeves, recent Spring Statement where she declared ‘full restoration of the UK’s headroom,’ the tariffs now on UK exports pose a big risk to growth and Reeves’ forecast.

Now, goods exported from the UK to the US will face a new additional 10% tariff, with goods from countries with substantial trade surpluses, like China (43%) or Vietnam (46%), with even higher rates. This means that the duties imposed will vary significantly based on both the type of goods exported and their country of origin. We already see countries initiating into ‘trade wars’, with China announcing that it will impose additional tariffs of 34% on all US goods from 10 April – matching the rate Trump introduced – and the US immediately responding with an additional 50% tariff taking the current total tariff to 104%.

Trump confirmed that an immediate 10% base line tariff would be introduced on 5 April with further reciprocal tariffs being imposed from 9 April 2025. Although ‘full reciprocal’ tariffs were considered, it was determined that a discounted rate of up to 50% would be imposed.

These new tariffs will apply to all goods that are not already subject to Executive Orders (e.g. Steel and Aluminium) as those rates continue to apply. Further US tariffs were planned on some individual sectors including semiconductors, pharmaceuticals and critical mineral imports.

Our experts take…

Greg Mayne, VAT Partner, comments:

President Trump previously stated that tariff was the most beautiful word in the dictionary and has followed this up with his self-proclaimed ‘Liberation Day’ with accompanying swingeing – some might say punitive – tariff increases on goods coming into the US. Some have seen this as the end of globalism, and the arrival of isolationist, protectionist, measures aimed at either kickstarting or repairing manufacturing and national production of goods and materials for the US market. The impact on global supply chains cannot be underestimated, with many nation states and trading blocs impacted almost overnight with charges that make continued production and supply questionable at best, or impossible at worst. Many will be desperately beating a path to the White House for an opportunity to negotiate down any tariff rates, whilst also reviewing alternative markets and opportunities.

What shouldn’t be overlooked is that any customs tariff is a cost to the importer, rather than the exporter. Tariff charges are paid to the relevant customs authority in the country of arrival, and ultimately to the Exchequer for that country. Some economist commentators have estimated the additional amounts of revenue to the US exchequer to be in the region of $3-$5trillion in the next 10 years. Whatever that additional cost might turn out to be, it is the US importer that pays it, and that can run the risk of making the import impossible cost-wise, or it will drive up prices within the US.

How might the changes to tariffs affect my business?

It is still too soon to understand exactly how these new tariffs will impact businesses. The UK continues to push forward on establishing a trade agreement with the US and feels this is the best way to minimise the impact on UK business. Following Trump’s “Liberation Day” announcement, Sir Keir Starmer has promised they have moved to the next stage of their plan after prior negotiations with the US failed. This agreement is seen as a crucial step in maintaining favourable trade conditions. However, the success of these negotiations remains uncertain, especially given Trump’s stance on taxes like VAT, which he has categorised as another tariff, and views as barriers to trade.

There are several potential scenarios that UK businesses and individuals should keep in mind:

Cost inflation across supply chains – Businesses may face higher prices for materials, components, or transportation. For example, the car tariff could be highly problematic for the UK who accounted for £6.4 billion worth of car exports in 2023. The additional tariff cost could simply not be absorbed by the importers and end customers.
Potential for discounts – exporters to US who are struggling to justify, or meet, the additional tariff charges may look to offload stock of goods and materials to other markets, potentially at discounted prices. UK businesses may benefit from these opportunities.
Reduced global demand – As international goods become more expensive, consumers and businesses may cut back on spending, particularly in export-focused industries.
Tighter financial conditions – Investor confidence may drop further, making it more difficult or expensive to access funding and finance.

What can I do now?

Impact assessment: Evaluate the impact of tariffs on your product lines by mapping the country of origin and applicable duty rates.
Review supply chains and consider alternative suppliers: Assess and adjust supply chains to minimise exposure to tariff-affected goods. This may mean identifying alternative suppliers to mitigate cost increases.
Ensure customs compliance including accurate documentation: Ensure accurate documentation regarding country of origin and material composition.

How can Price Bailey help me?

UK businesses that are either directly involved in importing from, or exporting to, the US will need to ensure that their products are accurately classified for customs purposes, and that any origin statements and certificates are up to date. This would be expected in the normal course of business, but with tariff increases should be reviewed and updated accordingly. Our team of experts here at Price Bailey, led by Greg Mayne, international VAT specialist and Partner, can assist you through this process.

FAQ’s

Will the new tariffs replace existing tariffs?

At present, they appear to be additive – layered on top of current tariffs. So a product from the UK that might normally attract, say, 2.6% import duty into the US will now attract 12.6%

How can I prove the origin of my goods?

Certificates of origin can be obtained from national customs authorities. Remember that ‘originating status’ can mean where the goods or materials are manufactured, or where there is significant (and sufficient) processing carried out to them to change their status enough to also change their origin. An example would be fruit from one country that is turned into jam in another country. Each product will have rules signifying the level of processing that is required to alter the status.

It is not enough simply to be shipped from a country to be able to say that is where it originates for customs purposes, so moving goods through a country won’t change their origin.

Read our previous update published 7 January 2025

“Tariff is the most beautiful word in the dictionary”

So said Donald Trump in a campaign speech on 19 October 2024 whilst setting out his plans to increase jobs and corporate presence in the US once he was re-elected. This statement was coined, as part of his winning pitch to the US electorate, with the suggestion to impose varying tariffs depending on the trading bloc on all imports into the US – a move which could cost the UK a substantial £22bn in lost exports.

It’s probably worth a quick look at tariffs in a general sense and how they can impact and influence supply chains and commercial decision-making.

The imposition of tariffs or charges for the movement of goods has been an issue for thousands of years. Ancient civilisations would charge merchants a fee or percentage to bring in food products such as salt, wheat, or livestock, and in more recent times tales were told of smugglers battling the ‘Excise Men’ to illegally bring in wool, lace, or brandy, in order to avoid paying hefty import charges. The tariffs were, in part at least, implemented to try to protect national interests and businesses who might suffer from over-importation of similar products, often at a cheaper price.

The same basic principles apply today, and the use and implementation of tariffs can help to control levels of imports, protect local (national) business sectors, and at the same time bring in useful amounts to the revenue coffers.

How could this affect me?

If the new Presidency of Mr Trump does bring with it a sweeping range of increased tariffs then the impact could be widespread, and would extend beyond the immediate point of importation or export of goods to those involved in the subsequent supply chains. Commentators have differing views on whether the proposals will support and enhance the commercial position for the US, or whether it will isolate and separate US businesses from the wider marketplace. Whether this makes other markets – the EU for example – a more attractive proposition is open to discussion, but the UK Prime Minister Sir Keir Starmer stated that the UK did not have to take sides.

“The national interest demands that we work with both.”

Lord Mayors Banquet 2 December 2024

If history repeats itself then any move by the US to impose higher tariffs on imported goods will result in retaliatory measures by other trading blocs, possibly including the UK. This would make UK products harder to sell to US customers, but also impact the import of high profile US items such as the often-mentioned Levi jeans, Jack Daniels, and Harley Davidson, as well as various electronic items and raw materials used by UK businesses.

What should I do?

UK businesses that are either directly involved in importing from, or exporting to, the US will need to ensure that their products are accurately classified for customs purposes, and that any origin statements and certificates are up to date. This would be expected in the normal course of business, but with potential tariff increases should be reviewed and updated accordingly.

Whilst there is no guarantee that these proposed measures will make it into actual law next year, nor any suggestion that there is a looming trade war involving the US and the rest of the world, it might be prudent for businesses to explore potential other markets or providers in case the US becomes unattractive due to trade charges.

If you would like to discuss any concerns over any potential changes to the import and export processes for your business please contact one of the team.

We always recommend that you seek advice from a suitably qualified adviser before taking any action. The information in this article only serves as a guide and no responsibility for loss occasioned by any person acting or refraining from action as a result of this material can be accepted by the authors or the firm.

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