US and UK tariffs and trade deals have been hot topics in the media – but what does it all actually mean, and what effects will it have on your business and your customers? Let’s start with the basics…

What is a tariff?

A tariff is a tax placed on any item that is brought into a country from abroad. When a tariff is added, foreign goods become more expensive.

What is the aim of a tariff?

A tariff (in theory) should make domestic-made products more competitively priced and appealing to the consumer. It’s a way of protecting local industries from cheaper foreign imports, and aims to boost domestic production.

What is a trade deal?

A trade deal is an agreement between countries about how they buy and sell products with each other. Negotiations often centre heavily around any tariffs that are in place, in the hope of making trade smoother and cheaper.

Trump, Trade & Tariffs – What it actually means

The US-UK have been working on a deal to reduce trade tariffs.

Currently, most goods imported to the US from the UK are subject to 10% tariffs. How much your business might be impacted by this depends if the US market is a key part of your customer base, or your business relies heavily on imports from the US.

If your business imports or exports – the government is providing a helpful search tool that allows you to find the duty and tax rate on any item, find it here.

What are your options?

• Pass on higher export/import fees to the consumer by raising your prices
• Take the financial blow of increased taxes to keep your prices competitive

What about tariffs for e-commerce?

As part of the US-UK trade deal, it has been rumoured that the UK may be reducing the current 2% tax on online US retailers. This is a tax that has been in place since 2020 with the aim of taxing US giants such as Amazon, Google and Apple to give a fairer chance to small UK retail businesses. Watch this space!

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