New US Tariffs on UK Exports from 5 April

New US Tariffs on UK Exports from 5 April 2025

What UK Businesses Need to Know

New US Tariffs on UK Exports from 5 April: What UK Businesses Need to Know

Published by Barnett & Co Accountants | 4 April 2025

Starting Saturday, 5 April, UK exporters will face a 10% reciprocal import tariff on most goods entering the United States. This change, announced by President Trump as part of his so-called "Liberation Day" trade reset, marks a major shift in global trade policy and could significantly impact the UK's £62bn annual export market to the US.

While some products—including pharmaceuticals, copper, semiconductors, lumber, and energy-related goods—have been granted exemptions, many UK businesses will feel the effects immediately.

What Has Changed?

As part of a sweeping overhaul of US trade policy:

• All foreign-made cars will now face a 25% import tariff into the US.

• All other goods from the UK will be subject to a 10% import tariff, unless exempt.

• Tariffs are based on country of origin, not the country of export—this adds complexity for companies with global supply chains.

The UK’s relatively balanced trade position with the US spared it from harsher penalties, unlike the EU (20%) or Asia (up to 46% in some countries). However, UK-based exporters still need to act swiftly to assess how these changes may affect profitability, pricing, and logistics.

Key Sectors Affected

1. Automotive Industry
   UK car manufacturers like Jaguar Land Rover, Aston Martin and Rolls-Royce face an immediate 25% tariff. Though many are foreign-owned, the impact will still ripple through UK-based jobs and supply chains.

2. Manufacturing & High-Tech Equipment
   With significant exports to the US, manufacturers—particularly in the West Midlands and East of England—should prepare for price pressures and potential re-evaluation of US contracts.

3. Alcohol & Whisky
   The iconic Scotch whisky industry is facing a likely 10% spike in pricing, potentially reducing competitiveness in the US market.

4. Pharmaceuticals
   One bright spot: this sector has been explicitly exempted. However, firms should still double-check classification and rules of origin to avoid surprises.

Why This Matters

This tariff change is not simply a tweak to policy—it represents a fundamental shift in the world trade order. President Trump’s administration is seeking to apply "reciprocal" tariffs that mirror trade imbalances and penalise countries that, in the president’s view, restrict US exports.

As President Trump stated:

"Permitting these asymmetries to continue is not sustainable… A nation’s ability to produce domestically is the bedrock of its national and economic security."

This approach adds a layer of unpredictability to international trade—especially for UK businesses that rely on complex, cross-border supply chains.

What UK Businesses Should Do Now

1. Review Your Export Portfolio
   Assess which products are impacted and model the impact of the 10% tariff on pricing and margins.

2. Understand Rules of Origin
   Goods made from global components may not qualify for the UK tariff rate. Work with customs experts to confirm origin classification.

3. Engage in the UK Government Consultation
   The Department for Business and Trade (DBT) is soliciting input from UK businesses on how the government should respond. This consultation is open until 1 May 2025 and could shape future retaliatory tariffs or negotiation strategy.

4. Stay Close to Policy Developments
   With UK-US trade talks ongoing, outcomes could change quickly. Both Prime Minister Sir Keir Starmer and Business Secretary Jonathan Reynolds have committed to protecting British business interests, but warn that any deal must be in the national interest.