Read on for actionable steps regarding potential US tariff increase, getting you informed, and keeping you protected.  

 

Potential US Tariff Increase on UK Imports Explained

Currently, most US imports from the UK fall under the existing global baseline tariff, meaning that goods have a 10% tariff. Some items are subject to a higher tariff of 25%. This new tariff could be adding an extra 10% to existing figures, starting on the 1st of February, and could potentially increase to 25% on the 1st of June.  
 

Currently, the exact details of what will occur and when are still up in the air. However, small businesses who could be affected by tariff increases may find that preparing will help them, regardless of what happens. Read on for actionable steps small businesses can take to protect themselves

 

How UK Small Businesses Can Protect Themselves From US Tariff Increases

Key Actions to Take Before US Tariffs Increase

We see a variety of approaches to handling this new consideration when importing products into America. Here are steps to take and consider:

 

• Understand the Financial Impact of Higher US Tariffs

Do everything you can to get informed on what exactly you need to be paying and when. While the general rate is 10% and most often this money is paid upon entrance to the US, be sure to make sure you fully understand your product’s classification and then track it, ensuring it doesn’t fall into a suspension or exemption at any point. Don’t misclassify and pay more than you owe. 

 

• Avoid Costly Errors by Correctly Classifying Your Products

Instead of raising your prices across the board, consider your options for increasing capital. You can raise prices on exported products, or bundle products together, or increase prices on certain products within your range. Consider the customer when making changes to price, which leads into…

 

• Building Trust Through Transparent Customer Communication

Clients and customers do tend to respond better to clear communication. Authenticity and honesty go a long way, and these are not exactly circumstances caused by you. Emphasise how your quality and service, and the product itself, cannot remain unchanged under these new circumstances. Let your customers know that changes may be coming.

 

• Renegotiating Supplier and Partner Agreements Amid Tariff Changes

There is a possibility that you may be able to renegotiate with suppliers or partners, with these new tariffs in mind. Even the smallest change can make a difference, so be sure to discuss the new charges with a view to improve payment plans or explore terms of contracts looking for ways to cut costs, such as price or volume differences. 

 

• Building a Financial Buffer Against Tariff Pressure

Tariffs place strain on your cash flow. Build a buffer, request deposits, tighten your control of inventory, all of these will help you prepare for upcoming changes and navigate your business through tough times. 

 

• When to Pause or Exit the US Market Strategically

For some small businesses, a smart strategic move could be deciding at what point you pause, or stop entirely, US sales. It could be when you hit a certain margin or number, but knowing when you would need to stop in order to protect your business in the long run is sure to be a wise strategic move. You could consider moving your business to less turbulent countries in a similar geographic area, or decide to re-enter the US when prices are less high. 

 

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