US tariffs on British goods have changed several times since the original tariff announcements of April 2025. For UK businesses exporting to the United States, the position in 2026 is therefore very different from the one that applied when the first wave of so-called “Liberation Day” tariffs was announced.
As of 24 July 2026, the United States applies a new 10% Section 301 additional tariff to most covered goods from the United Kingdom, subject to important product exemptions and separate treatment for goods covered by other tariff regimes, particularly Section 232. The UK-US Economic Prosperity Deal also continues to provide preferential treatment for sectors including cars, aerospace, pharmaceuticals and, more recently, whisky and medical technology.
That means there is no single tariff percentage that every UK exporter can apply to every shipment.
Your actual US customs cost can depend on:
- what product you are exporting;
- its US tariff classification;
- where the goods originate;
- whether a product-specific exemption applies;
- whether the goods fall under Section 232 rather than Section 301;
- whether a tariff-rate quota applies;
- the normal US Most-Favoured-Nation duty; and
- the commercial terms agreed with your US customer.
For businesses, the question is therefore no longer simply “Is there a 10% US tariff on UK goods?”
The more useful questions are:
Which tariff applies to my product, who bears the cost, and what does it do to my margin, pricing and cash flow?
US tariffs on UK goods: the position in August 2026
The current tariff landscape is easier to understand if you separate the general tariff regime from the special treatment available to certain sectors.
| UK export | Current broad position |
|---|---|
| Most covered UK goods | 10% additional Section 301 tariff from 24 July 2026, subject to exemptions |
| Cars | 10% tariff within the agreed 100,000-vehicle quota |
| Eligible aerospace products | Additional tariffs removed under the UK-US deal |
| Pharmaceuticals | 0% treatment under the UK-US pharmaceutical arrangement, subject to its terms |
| UK whisky | 0% US tariff from 24 July 2026 |
| Medical technology | 0% treatment under the latest UK-US arrangements |
| Core steel and aluminium | Separate Section 232 treatment; the UK has preferential 25% treatment rather than the higher global rate |
| Other Section 232 goods | Separate rules apply and the new Section 301 tariff does not apply to articles already subject to Section 232 |
The important point is that 10% is not necessarily the total customs duty on a shipment. The Section 301 charge is an additional tariff for covered products and normal US customs duties may still apply. Equally, a product may be exempt from the Section 301 action altogether.
Businesses should therefore check the precise commodity classification and applicable US customs treatment rather than relying on headline tariff rates.
What changed with US tariffs in July 2026?
The latest major change took effect on 24 July 2026.
The Office of the United States Trade Representative imposed Section 301 tariffs on 60 trading partners following investigations relating to forced-labour import prohibitions.
For the United Kingdom, USTR set the Section 301 rate at 10%. The measure generally covers imports from the UK unless the product is specifically exempt. Goods already subject to Section 232 tariffs are excluded from this particular Section 301 action.
The Federal Register notice states that the additional duties apply to goods entered for consumption from 12:01am Eastern Time on 24 July 2026, with limited transitional treatment for certain goods already in transit.
This is why articles that still describe the April 2025 “Liberation Day” tariff structure as the current US tariff regime are now out of date.
What happened to the original 10% tariff announced in 2025?
In April 2025, most UK imports entering the United States became subject to an additional 10% tariff, while cars, steel and aluminium were dealt with separately.
That initial regime drove much of the coverage UK businesses saw during 2025.
The tariff framework subsequently changed considerably.
During 2026, the United States introduced a temporary 10% Section 122 import surcharge, effective from 24 February 2026. The proclamation specified that the measure would run for 150 days and continue through 24 July 2026 unless changed earlier or extended by Congress.
On 24 July, the new Section 301 action began.
So while UK businesses may continue to see the figure 10%, the legal basis and product exemptions behind that percentage have changed.
This matters because businesses cannot safely assume that a tariff calculation made in April 2025, January 2026 or even early July 2026 is still correct today.
Does the UK-US Economic Prosperity Deal still apply?
Yes.
The UK and United States announced the general terms of the UK-US Economic Prosperity Deal in May 2025, with important provisions subsequently implemented for individual sectors.
Following the July 2026 tariff announcement, the UK Government specifically confirmed that the Economic Prosperity Deal remained in place.
For a more detailed history of that agreement, read our guide to the UK-US tariff deal and its impact on British businesses.
The distinction is important.
The Economic Prosperity Deal does not mean that all UK goods now enter America tariff-free. Instead, it has produced preferential outcomes for particular products and sectors.
US tariffs on UK cars
The automotive industry received one of the most significant concessions under the UK-US agreement.
The United States created a quota covering 100,000 UK vehicles at a 10% tariff rate, with the quota administered through quarterly allocations. Associated arrangements also apply to qualifying automotive parts linked to UK-manufactured passenger cars.
Before the concession, UK cars faced a substantially higher rate.
For manufacturers and businesses within the automotive supply chain, however, it remains important to establish whether a particular shipment qualifies for the preferential treatment.
Businesses should not assume that every automotive component automatically receives the 10% rate simply because it is manufactured in Britain.
Classification, origin and quota eligibility still matter.
US tariffs on UK aerospace exports
UK aerospace received more favourable treatment.
When the UK-US agreement was implemented in June 2025, additional US tariffs on qualifying UK aerospace products such as aircraft parts and engines were removed, returning treatment to the relevant Most-Favoured-Nation position. The UK Government described this as removing the additional 10% tariff from the sector and committing to maintain the preferential treatment.
This gives British aerospace manufacturers an advantage compared with exporters in jurisdictions that remain subject to higher additional tariffs.
Again, exporters should confirm that their particular product falls within the qualifying tariff classification.
US tariffs on UK pharmaceuticals
Pharmaceuticals received another major change in 2026.
The UK became the first country to secure a US commitment to 0% tariffs on pharmaceutical exports under a bilateral pharmaceutical pricing and trade arrangement.
The arrangement provides for no US Section 232 tariffs on covered UK pharmaceutical products from 1 January 2026 to 19 January 2029, subject to the conditions in the agreement, including relevant company commitments.
This is particularly important because pharmaceuticals represent a high-value part of the UK-US trading relationship.
For companies in the life-sciences supply chain, however, “0% pharmaceutical tariffs” should not be treated as a blanket statement covering every healthcare-related product without checking the relevant classification and terms.
UK whisky now has a 0% US tariff
One of the newest developments came on 24 July 2026.
The UK Government announced that whisky from the United Kingdom would receive zero-tariff treatment in the United States from that date.
The US is an especially important market for British whisky producers. Government figures put UK whisky exports to the United States at around £1 billion in 2025.
For distillers and businesses throughout the wider supply chain including packaging businesses, farmers, logistics providers and distributors the removal provides a significant improvement in access to the US market.
It also illustrates why businesses need to look beyond the headline “10% UK tariff”.
A UK whisky exporter and a UK manufacturer of another product can now face very different US tariff outcomes.
What about UK medical technology exports?
The July 2026 UK Government announcement also confirmed zero-tariff treatment for medical technology as part of the continuing UK-US Economic Prosperity Deal.
Businesses operating in this sector should still establish precisely which product classifications qualify.
A commercial description such as “medical equipment” or “health technology” is not a substitute for the tariff classification used by US customs authorities.
What tariff applies to UK steel and aluminium?
Steel and aluminium are particularly important exceptions to the general 10% Section 301 position.
The latest Section 301 action expressly excludes goods already subject to Section 232 tariffs.
The UK has negotiated preferential treatment for core steel and aluminium exports. Recent UK Government material describes this as a 25% tariff for core UK steel and aluminium exports, compared with higher treatment faced by other exporters, while negotiations have previously aimed at further reductions.
For a steel or aluminium exporter, this means the generic 10% Section 301 figure should not be used automatically.
The applicable Section 232 measure, commodity code, origin requirements and any relevant derivative-product rules must be checked.
Who actually pays a US tariff?
Technically, a US import tariff is normally collected from the importer of the goods into the United States.
The Office for National Statistics describes tariffs as taxes on imports paid by the importer.
But that does not necessarily mean the British exporter escapes the economic cost.
Imagine a US customer purchases a British product for £100.
If an additional tariff makes that product more expensive to import, several things can happen:
- the US customer absorbs the additional cost;
- the British exporter reduces its selling price;
- the cost is shared between both parties;
- the customer increases its retail price;
- the customer reduces the quantity ordered; or
- the US customer looks for a supplier from another market.
Which outcome applies depends heavily on contracts, market conditions, competition and bargaining power.
That is why tariff exposure ultimately becomes an accounting and commercial planning issue, not simply a customs issue.
Check your Incoterms and contracts
Exporters should also review who has agreed to take responsibility for import duties.
Your contractual terms and Incoterms can affect the commercial allocation of customs costs.
Do not assume that because US Customs collects the tariff in America, your customer will necessarily bear every additional cost.
Review:
- Incoterms used on current contracts;
- who acts as importer of record;
- whether contracts allow price adjustments following tariff changes;
- whether duties are included in your quoted selling price;
- how exchange-rate movements are handled; and
- whether long-term contracts contain renegotiation clauses.
Where the contractual position is unclear, take appropriate customs or legal advice.
Small UK exporters and ecommerce sellers also need to pay attention
Tariffs are not only an issue for major manufacturers.
The United States suspended its previous de minimis treatment for relevant low-value shipments, meaning UK goods entering the US can face duties even when their value is below $800.
UK Government export guidance says this has applied since 29 August 2025 and advises businesses to check requirements with carriers.
That matters to:
- ecommerce retailers;
- Etsy and marketplace sellers;
- direct-to-consumer brands;
- small manufacturers;
- fashion businesses;
- jewellery and accessories businesses; and
- businesses sending replacement parts or samples.
A tariff that looks manageable on a large commercial shipment may have a very different effect on the economics of a relatively small ecommerce order once courier and customs-handling charges are also considered.
How have US tariffs affected UK exports?
There is now enough official data to show that tariffs have had a measurable impact on UK-US goods trade.
According to the Office for National Statistics, UK goods exports to the United States rose sharply immediately before the April 2025 tariffs, which was likely partly caused by businesses bringing shipments forward.
After the tariffs were introduced, the value of UK goods exports to the US fell by £1.5 billion, or 24.7%, between March and April 2025, excluding precious metals. Exports subsequently remained below pre-tariff levels through the period analysed by ONS up to February 2026.
The United States remains an extremely important market for British exporters, but its share of UK goods exports also fell. ONS reported that the US accounted for 14.9% of UK goods exports between April 2025 and February 2026, compared with 17.2% during 2024.
Tariff effects are therefore not merely theoretical.
They can influence real order volumes, pricing decisions and investment plans.
How many UK businesses have been affected by US tariffs?
ONS business data also gives us a clearer picture of the impact.
In late February 2026, 33% of businesses with 10 or more employees that had exported goods during the previous 12 months said they had been affected by US tariffs during the previous month.
A further 18.7% reported experiencing additional costs.
Not every business is affected in the same way.
The effect depends on:
- exposure to the US market;
- product type;
- gross margin;
- availability of alternative suppliers or markets;
- customer price sensitivity;
- currency movements; and
- the ability to renegotiate prices.
For a high-margin specialist manufacturer, absorbing part of a tariff may be commercially possible.
For a low-margin exporter competing primarily on price, the same percentage could remove a large part of the profit from an order.
Which British businesses are most exposed to US tariffs?
Direct exporters are the obvious group, but tariff exposure can travel through supply chains.
UK manufacturers exporting directly to America
A British manufacturer selling directly to an American distributor or customer should establish the precise duty applying to each exported product.
This is especially important if quotations or contracts were agreed before July 2026.
Businesses supplying UK exporters
You may never send an invoice to an American customer and still be affected.
If your largest customer manufactures goods for export to the US, falling American demand or reduced margins can eventually affect your order book.
Ecommerce businesses
Businesses sending relatively low-value parcels into the United States can be affected by tariffs, customs administration and carrier charges following the removal of the low-value exemption.
Automotive supply-chain businesses
Preferential treatment for qualifying UK vehicles is positive, but suppliers still need to understand whether their own goods qualify for related treatment.
Food and drink exporters
Whisky now benefits from zero tariffs, but that does not mean every British food and drink export receives the same treatment.
Import-dependent UK businesses
Some UK firms can also feel the indirect consequences of international tariff changes through supplier pricing, shipping arrangements or changing patterns of global demand.
How can tariffs affect your profit margin?
Suppose your company sells goods to a US customer for £100,000 and your direct cost of supplying them is £70,000.
Your gross profit before considering tariff-related changes is £30,000.
Now suppose your US customer tells you that the tariff has made the order too expensive and asks for a 5% reduction in your price.
Your revenue drops by £5,000.
If your underlying production cost remains £70,000, gross profit falls from £30,000 to £25,000.
Revenue has fallen by only 5%, but gross profit has fallen by more than 16%.
That is the danger businesses can overlook.
A modest discount designed to share tariff costs can produce a much larger percentage reduction in profit.
Businesses exposed to tariffs should therefore model margin, not just turnover.
If you want a clearer understanding of the numbers you should be monitoring regularly, see our guide to the financial reports every small business owner should review.
How can tariffs affect cash flow?
Cash-flow effects can be just as important as profit.
A tariff shock can cause customers to:
- delay orders;
- negotiate longer payment terms;
- buy smaller quantities;
- request price reductions;
- hold less stock;
- cancel planned purchases; or
- move to alternative suppliers.
At the same time, your business may still need to pay staff, suppliers, rent, finance costs and other overheads.
This creates a timing problem.
A business can still appear profitable on paper while experiencing pressure on the cash available to meet its obligations.
Your cash-flow planning should therefore test different scenarios rather than assuming US sales continue at their previous level.
What should UK businesses do about US tariffs?
Businesses exposed to the United States should take a structured approach rather than reacting to each headline.
1. Confirm your tariff classification
Start with the correct US commodity or HTS classification.
Do not rely solely on a product’s normal commercial description.
The exact classification can determine whether the product is:
- subject to the 10% Section 301 tariff;
- exempt from it;
- covered by Section 232;
- eligible for an Economic Prosperity Deal concession; or
- subject to another normal customs rate.
A customs broker, freight forwarder or specialist trade adviser can help where classification is uncertain.
2. Confirm the origin of your goods
“Sold by a UK company” and “originating in the UK” are not necessarily the same thing for customs purposes.
Businesses importing components from several countries before assembling a final product should check the relevant rules of origin.
3. Review pricing customer by customer
Do not automatically apply the same percentage increase to every US customer.
Consider:
- current margin;
- strategic importance of the customer;
- competitor pricing;
- size of the order;
- whether the customer can pass costs on;
- exchange-rate movements; and
- whether the relationship is long term.
4. Model different tariff scenarios
Prepare financial models showing what happens if:
- you absorb the full additional cost;
- the customer absorbs it;
- you split the cost 50/50;
- US sales fall by 10%;
- US sales fall by 20%;
- shipping costs increase;
- sterling strengthens against the dollar; or
- a key US customer delays payment.
Scenario planning can help management decide what level of discount the business can afford without damaging cash reserves.
5. Review your bookkeeping and management information
If your bookkeeping is several months behind, you will struggle to understand tariff effects quickly enough.
Accurate bookkeeping gives you better information about sales, costs, debtors and margins.
Where possible, separate US sales from other export markets so you can monitor performance rather than relying only on total turnover.
6. Monitor gross margin by product
A company can grow turnover while becoming less profitable.
If tariff pressure forces price discounts on certain product lines, monitor margin by product, customer and market.
That makes it easier to identify exports that are no longer commercially attractive.
7. Review working capital
Look at:
- trade debtors;
- stock levels;
- supplier payment terms;
- committed purchases;
- currency exposure; and
- available cash reserves.
If US demand becomes less predictable, carrying excessive stock can tie up cash at exactly the wrong time.
8. Consider alternative export markets
The United States remains a huge and valuable market, so diversification does not necessarily mean leaving it.
But relying too heavily on one overseas market increases commercial risk.
Businesses may want to consider whether growth opportunities exist elsewhere while retaining existing US relationships.
9. Keep checking official updates
US trade policy has changed repeatedly since 2025.
A tariff rate that is correct today may change following a new trade agreement, exemption, tariff investigation or US customs notice.
Businesses that export regularly should therefore make tariff checking part of their normal sales and fulfilment process.
Can your accountant tell you which US customs tariff applies?
An accountant can help with the financial consequences of tariffs, but determining the exact customs classification of specialised products may require a customs broker, freight forwarder or specialist international-trade adviser.
That distinction matters.
Your accountant can help you:
- calculate gross margins;
- model different selling prices;
- assess the effect of lower order volumes;
- prepare cash-flow forecasts;
- monitor customer profitability;
- review working capital;
- assess the affordability of discounts;
- analyse currency movements; and
- understand the wider impact on your accounts and tax position.
The customs specialist determines which tariff treatment applies.
The accountant helps you understand whether the resulting business is still profitable.
For limited companies looking for wider accounting support, you can also read about our limited company accountant services.
Are US tariffs subject to UK VAT?
A US import tariff is a US customs charge and is separate from UK VAT.
However, businesses exporting goods should still make sure that the underlying VAT treatment of their export transactions is correct and that suitable evidence is retained where required.
If VAT is creating uncertainty for your business, our VAT services provide more detailed support.
Do not simply treat a US tariff as though it were another form of UK VAT.
They are different taxes operating under different systems.
Should businesses increase prices because of US tariffs?
Not automatically.
A price increase is one possible response, but it should follow proper margin analysis.
Before changing prices, calculate:
- your existing gross profit per unit;
- the tariff or customs cost affecting the transaction;
- how much your US customer can absorb;
- competitor pricing;
- likely reduction in demand following a price increase; and
- the minimum margin you are prepared to accept.
Sometimes keeping the customer at a temporarily reduced margin is commercially sensible.
Sometimes it simply turns a profitable export contract into an unprofitable one.
The decision should be made using the numbers rather than instinct.
What is the US tariff on UK goods in 2026?
From 24 July 2026, most covered UK goods are subject to a 10% additional Section 301 tariff, but important exemptions and separate tariff regimes apply. Goods subject to Section 232 are excluded from this particular Section 301 measure.
Always check the exact tariff classification before calculating a shipment.
Is there a 10% tariff on everything exported from the UK to America?
No.
Some goods are exempt, while sectors such as cars, pharmaceuticals, aerospace, whisky, medical technology, steel and aluminium have separate or preferential treatment.
When did the latest 10% UK tariff start?
The current Section 301 additional tariff took effect on 24 July 2026, subject to transitional rules for certain goods already in transit.
Do UK cars face a 10% tariff in America?
Eligible UK cars can enter under a 100,000-vehicle quota at a 10% tariff rate, with the quota administered through quarterly arrangements.
Does Scotch whisky face a US tariff?
UK whisky moved to 0% tariff treatment from 24 July 2026.
Do UK pharmaceuticals face US tariffs?
The UK has secured a 0% tariff arrangement for covered pharmaceutical exports, subject to the terms and conditions of the bilateral pharmaceutical agreement.
Who pays a tariff when I export to America?
US customs duties are generally collected from the importer in the United States, but the economic cost may ultimately be borne by the importer, exporter, customer or a combination depending on contractual terms and pricing.
Do tariffs apply to small parcels sent to US customers?
The previous US low-value de minimis treatment was suspended, so UK exporters should no longer assume that shipments below $800 automatically avoid US customs duties.
Will US tariffs change again?
They can.
US tariff policy has changed several times since 2025 and individual product exemptions or bilateral arrangements may also change. Businesses exporting regularly should check official tariff information before relying on a previously quoted rate.
What UK businesses should do now
The biggest mistake for a UK exporter is to treat “10% US tariff” as a complete answer.
It is not.
First establish which tariff regime applies to your product.
Then understand what that tariff means commercially.
Review your pricing. Check your margins. Look at customer concentration. Update your cash-flow forecasts. Make sure your bookkeeping is current. Test what happens if US customers reduce orders or ask you to share the additional cost.
The companies best placed to handle tariff uncertainty are generally those that can see their financial position clearly enough to respond quickly.
If your business is affected by changing US trade conditions and you need help understanding the impact on margins, cash flow or wider financial planning, contact Accounting People to discuss your circumstances.
This article provides general information and does not constitute customs, legal or personalised tax advice. US tariff treatment depends on matters including product classification, country of origin, exemptions, quotas and the applicable US customs rules. Businesses should confirm the treatment of individual products through official US tariff information and obtain specialist customs advice where necessary.
