U.S. intends to raise customs duties, once more defers implementation timeline

The Trump administration's decision to implement tariffs on certain goods has sparked concerns among UK businesses. According to a study conducted by the Organisation for Economic Co-operation and Development (OECD), over 90% of British companies fear being affected by these tariffs in 2023.

The US has raised tariffs on more than 90 countries, including Canada, Brazil, and South Africa, and the UK is not an exception. The US has a 10% tariff on vehicle and automotive part exports to the US, and the Trump administration recently increased tariffs on Canada to 35%.

The US Customs and Border Protection (CBP) will have additional time to make the necessary changes to record and collect duties. However, it remains unclear how the CBP will determine if goods have been transshipped to evade tariffs or implement these charges. The potential additional fines on goods determined by the CBP to have been transshipped to evade tariffs add to the uncertainty.

The tariffs have already taken a toll on UK businesses. More than three-quarters (78%) of UK businesses have already lost profit due to the tariffs, and ninety-one percent (91%) of UK businesses fear the impact of tariffs over the next year.

The lag between tariff updates and implementing price changes creates a window for competitors to capture significant market advantage. Pricing agility has become an essential survival skill for UK businesses. Andrew Butt, founder and CEO of Enable, an AI-driven rebate and pricing management platform, emphasised the importance of swift pricing adjustments in the face of tariffs.

Eighty-six percent (86%) of companies surveyed plan to increase prices to offset tariff impacts. However, sixty-six percent (66%) of UK businesses said it could take months to implement price increases, which could further exacerbate the profit loss.

The new tariffs will come into effect in seven days, and the US has paused higher tariffs on Mexico for another 90 days. The implementation of these tariffs and the uncertainty surrounding their enforcement have created a challenging environment for UK businesses, with pricing responsiveness becoming a critical factor for profitability.