The world of trade has been shaken once again this time by a fresh wave of US tariffs introduced by President Donald Trump. Labelled ‘Liberation Day’, this move has rewritten the global trade rulebook overnight. These sweeping tariffs are not just headlines; they’re real-world disruptions with direct consequences for UK businesses that export to, or rely on, trade with the United States.
What Are the New US Tariffs?
President Trump has announced a universal tariff on most imports—yes, that includes the UK as well as sector-specific and reciprocal tariffs targeting selected countries. While the EU faces even higher rates, the UK is currently subject to the baseline universal tariff of 10%, although this may change once a trade deal is in place.
Here’s a quick breakdown of what’s in force:
| Tariff Type | Effective Date | Details |
|---|---|---|
| 10% universal tariff | From 5 April | Applies to most imported goods (exemptions: electronics, computers, smartphones—for now) |
| Reciprocal tariffs | From 9 April | Tailored to selected countries |
| 25% on vehicle imports | From 3 April | Includes passenger cars and commercial vehicles |
| 25% on automotive parts | From 2 May | Could severely impact manufacturing supply chains |
| 25% on aluminium and steel | From 12 March | Impacts UK metals exports—particularly serious given the US is our second-largest export market |
Who’s Affected?
UK businesses that directly export to the US will feel the impact most immediately. However, even those who don’t trade directly might be affected by:
- Supply chain disruption – especially if suppliers pass on added costs
- Increased prices – raw materials, components and logistics could get pricier
- Limited availability – expect shortages or delays in certain product lines
This is particularly worrying for industries like automotive manufacturing, metals, and tech. And with already challenging trading conditions, rising energy costs and lower consumer demand, businesses will need to react swiftly and strategically.
How Accountants Can Support Clients Through Tariff Turmoil
Let’s face it—navigating global trade issues isn’t something most small or medium-sized businesses are prepared for. That’s where you, as a trusted advisor, step in.
Here’s how you can offer real value:
1. Help Revise Their Export Strategy
If your client exports to the US or relies on goods that do, now is the time for a full review of their export strategy. This includes:
- Calculating the breaking point—how much of a price increase can they absorb before profits start to suffer?
- Exploring alternative markets that might be less volatile
- Reassessing investment priorities
You could also help them model different scenarios based on projected tariff increases or supply chain costs.
2. Review Supply Chains and Sourcing
Higher supplier prices may force businesses to look elsewhere. Work with your clients to:
- Identify more cost-effective or local suppliers
- Consider diversifying sources to reduce risk
- Calculate the cost-benefit of maintaining current relationships versus shifting
While some price hikes may be unavoidable, there may still be ways to soften the blow.
3. Offer Company Restructuring Advice
For clients in a tight financial position (but still viable), restructuring might offer a route to stability. This can include:
- Renegotiating debts or payment terms
- Selling or refinancing assets
- Streamlining operations to reduce overheads
If needed, refer them to a licensed insolvency practitioner for expert restructuring support.
4. Flag Early Signs of Insolvency
If clients are already struggling with:
- Serious cash flow issues
- Mounting debts
- Increasing pressure from creditors
they could be approaching insolvency. Continuing to trade while insolvent can have serious consequences, including personal liability. If you’re unsure, refer them for a formal review by a licensed practitioner sooner rather than later.
Final Thoughts: Stay Proactive, Not Panicked
The global trade landscape is changing fast, and the effects of the US tariffs will continue to ripple across markets for months to come. Whether your client is directly affected or feeling the strain via supply chains, now is the time to act.
Help your clients:
- Stay on top of financial health
- Monitor cash flow closely
- Seek support early if signs of distress appear
With the right strategy and guidance, businesses can remain resilient—even in turbulent times.
