On 2 April 2025, the US President, Donald Trump, declared a “national emergency” and introduced wide-ranging tariffs across the world to “strengthen the international economic position of the United States and protect American workers”.
These “reciprocal tariffs” were placed on countries deemed to be giving the US a bad deal on trade, according to President Trump.
Tariffs are taxes charged on the import of goods from foreign countries. They can be used as a source of revenue for governments and to protect domestic industries from foreign competition.
In general, the importer pays the tariff, not the exporter. In the case of the new US tariffs, American companies will pay the tariffs to the US government.
President Trump stated that he has introduced these tariffs to incentivise and re-shore US manufacturing, “address the injustices of global trade”, bolster domestic jobs, and drive economic growth within the US.
The tariffs may limit access to the US market for UK firms, as the demand for UK exports may reduce. Restricted market access can hinder growth and expansion opportunities, forcing companies to look for alternative markets or scale down their operations. For SMEs, the additional financial burden will threaten competitiveness, margins, and long-term investments in innovation and R&D.
The supply chain for any components that are sourced from or destined for the US is likely to be disrupted. This disruption can lead to delays and increased operating costs that rely on a seamless flow of goods across the borders.
UK businesses that rely on goods or components from countries and areas that have been affected by higher reciprocal US tariffs could also face increased costs, which will likely affect manufacturing and demand for US goods.
Source: BHTA