Liberation Day Tariffs: What UK Businesses Need to Know

Under this plan, UK-origin goods exported to the US would be subject to a new 10% tariff, with significantly higher rates proposed for goods originating in countries with large trade surpluses — such as China or Vietnam. In practice, this could result in significant duty increases, depending not just on what you export, but also where those goods originate.

The Headline Points 

• A 10% blanket tariff would apply to all UK-origin exports to the US. 
• Much higher tariffs (e.g. 20–54%) would apply to goods from certain countries like China and Vietnam.
• These tariffs would be added to existing duties, not replace them.
• Key sectors already subject to high US tariffs — such as steel, aluminium and automotive — may remain unaffected or face further increases.
• Origin accuracy will be under much greater scrutiny, and errors could lead to seizure or penalties.
• For UK firms with US exposure, these changes affect landed cost, competitiveness, and contract viability. 

Why Origin Now Drives Tariff Cost More Than Ever 

Under the proposed system, the total tariff payable on a good entering the US will depend not only on the product classification but critically on its origin. Many businesses are currently exposed to this, both in planning and compliance.

Let’s take clothing as an example:

• Apparel imported from Vietnam is already subject to US MFN tariffs of up to 28.6%.
• Under the new rules, an additional 46% tariff could apply, taking the total up to 74.6%.
• In contrast, UK-origin clothing could see just a 10% increase (to, say, 10% or 13%, depending on the product’s base duty rate).
• China-origin goods may attract additional tariffs of 34%.

This means two otherwise identical garments could face wildly different duty rates — solely due to origin. The accuracy of origin data now directly impacts profit margins, pricing, and supply chain design.

Companies that rely on ERP systems to populate origin data—particularly if they are not regularly audited—are at risk. If origin is declared incorrectly and challenged by US customs, the consequences could include detention, seizure, or retroactive penalties.

Are These Tariffs Replacing Existing Ones? No – They Stack

There’s been some confusion about whether the new tariffs replace existing rates or set a new baseline. At present, they appear to be additive – layered on top of current tariffs such as MFN or Section 301/232 duties. 

• For example, a product already subject to 5% duty would now face 5% + 10% = 15%.
• Vietnam-origin clothing could go from 23% to 47%.
• China-origin goods could face as much as 54% total duties.
• The EU considered another trade surplus region, could be subject to a 20% combined tariff.

Although the Executive Order does not yet explicitly confirm this stacking mechanism, current reporting and early interpretations point firmly in this direction. 

This matters for UK exporters. It’s not just about checking whether your goods are affected—it’s about recalculating total landed costs and revalidating supply chain assumptions. Any exposure to the US market needs to be stress-tested. 

Commercial and Compliance Impacts 

Even if most US importers are contractually liable for paying duties under standard Incoterms, UK exporters must ask themselves:

• Will this impact demand or price sensitivity in the US market?
• Do we have fixed-price contracts that could now become loss-making?
• Have we modelled the effect of increased duties on market share, margin, and competitiveness?

This also creates pressure on compliance and risk management:

• Are we confident in our goods’ origin status, particularly under non-preferential origin rules (which are more open to interpretation than FTA rules)?
• Are we exposed to misstated origin data in ERP or third-party systems?
• Have we reviewed contractual protections around changes in duty or law?

Planning Opportunities 

While the headlines focus on cost, there are planning levers worth exploring: 

• US content deduction: If a UK export includes more than 20% US-origin value (based on FOB, not CIF), that portion may be exempt from the new tariff calculation.
• US duty drawback: Duty recovery becomes more valuable for goods imported into the US and then re-exported. Using FIFO inventory accounting could help recover duties on the highest-rate goods first.
• Trade deflection risk: As global suppliers redirect flows from the US to other markets (including the UK), there is a risk of oversupply. UK authorities have already floated the idea of quota monitoring, which could eventually lead to safeguard duties if thresholds are breached.

What Should UK Exporters Do Now? 

Even though the full policy details are still emerging, the direction of travel is unmistakable. The time to act is before these measures take hold. 

We recommend UK businesses ask: 

• Have we reviewed the origin status of our products under non-preferential rules?
• Are our ERP and customs declaration systems accurate and aligned?
• Are we exposed to contractual risk from duty increases or compliance failures?
• When did we last conduct an independent review of our US customs profile?