US tariffs are adding significant, unplanned costs for UK businesses with transatlantic operations and their US partners. RSM US Trade Advisory and Risk Consultants Mark Ludwig and Jason Alexander, RSM UK’s Customs and International Trade expert Brad Ashton and Director of JCB’s London office Charles Stevenson share tactics for adapting strategically to this evolving landscape.

Since the start of 2025, the US administration has used a variety of legislative means and rationales to impose tariffs on its key trading partners. There are now thousands of tariff codes subject to thousands of potentially different tariff rates – and the picture changes all the time.

“These days, we wake up and it’s different,” says Mark Ludwig, National Leader, Trade and Tariff Advisory Services at RSM US. “It’s very complex and very difficult, even for government agencies and day-to-day customs brokers.”

“Couple this scenario with the impact of the increased tariffs on US firms and you have an often-unmanageable situation,” says Brad Ashton, RSM UK Customs and International Trade partner.

The extra cost of US tariffs for UK businesses with US operations when shared with US importers can easily run into millions of pounds, especially for export-driven firms and manufacturers of high-value products reliant on international supply chains.

However, UK firms with transatlantic operations could take a fully compliance-led approach to mitigating the impact of tariffs by:

• Understanding the complexity of the situation and the pitfalls of making snap decisions.
• Accessing up-to-date intelligence.
• Building the knowledge, resource and network to integrate export and supply chain strategies into business models.

Tackling US tariffs – how UK businesses can use data effectively

In the current trading environment, the basis of a US import and export strategy for UK firms is agility combined with knowing your business inside out. It’s only by being on top of fast-moving events that it’s possible to understand the full impact of what increased tariffs mean for your business, your margins and supply chains.

“Knowing your data means you can project forward with a high level of precision when you’re planning your tariff and supply chain strategy,” says Mark Ludwig. “It’s about understanding what your company is trading and the countries of origin and so on for components.”

Breaking down the data then modelling and mapping the impact of tariffs specific to your businesses is, therefore, the first step for a fit-for-purpose US import and export strategy for UK firms operating across the Atlantic.

Yet, while firms can use their own data, some aspects of this first step aren’t always straightforward, as Charles Stevenson, London Office Director of UK-headquartered JCB explains. “JCB is one of the world’s largest construction equipment makers and a big consumer of steel. Component parts are being hit, but it’s almost impossible to work out the origin of all the steel from 10,000 parts.”

This aspect is crucial because it hinges on the difference between an item attracting a baseline 10% tariff or a higher 25% rate for materials that include Chinese steel. It also highlights how certain tariffs can have a much more material impact than others, both financially and administratively. Items covered by Section 232, for example, aren’t eligible for drawback. This is a refund of duties, taxes, or fees paid on imported goods when those goods are subsequently exported from the US or used in the manufacture of exported products. Similarly for copper, used in electrical components, and aluminium.

The scale of the actual and potential costs involved therefore makes it vital to have a strategy for managing the impact of US tariffs and understanding all those that could apply.

Responding to US tariffs – supply chain and inventory strategies for UK firms

JCB’s response to the current trading environment’s inherent uncertainty and complexity, which so far has directly cost the company hundreds of millions of pounds, is to double-down on its successful approach of having US manufacturing options. It’s new plant in San Antonio, Texas, will create up to 2,000 jobs when it’s fully operational by October 2026 and represents significant investment in the US by the Staffordshire-based company.

“Good businesses adapt quickly,” says Charles Stevenson. “We’re fortunate because we already have US supply chains and manufacturing in place and we like to take our partners with us.

“We’re also breaking ground on our second site in the US. But, we can’t always source from the US because the supply chain isn’t there. It’s about taking the necessary steps – being active, not reactive – and keeping out of unnecessary situations.”

Developing programmes that embed compliance in import and export programmes and throughout supply chains is good practice that supports margins and market share.

Other tactics for compliantly mitigating the latest tariff regime focus on efficiencies in:

• Using the First Sale for Export (FSFE) concept.
• Inventory management.
• Goods classification and valuation.
• Duty deferral, exemption and recovery programmes.

The FSFE strategy allows importers to declare an earlier, and therefore lower, transaction value when calculating duties. This would be based on the first bona fide sale of goods intended for export to the United States, rather than the final sale price paid by the US customer.

Optimising inventory strategies to mitigate US tariff impact

On inventory management, Mark Ludwig notes the increased popularity of bonded warehouses. “You can keep goods in there for up to five years in the US. This means that if tariffs change – and you have the luxury of sitting on that inventory – then you can bring the goods in and make a declaration. This arrangement is relatively low cost and not too difficult to establish and administer.

Classification is also a factor to consider, because it can make a substantial difference to import duties, which the Chinese steel example highlights.

“Tariff engineering, where decisions around the design of goods and materials used are informed by their tariff consequences, presents an opportunity for businesses,” says Brad Ashton. “For this to be viable, then design, procurement, tax and other teams need to work together at the start of the process to ensure the impact of tariffs is understood.

“Valuation is the most challenging area for a lot of companies. Making sure that the value declared only includes the required elements, can minimise the impact of increased tariffs. This is particularly true where goods are imported based on a transfer price. While optimising transfer pricing for customs purposes should be approached with caution, it can yield significant results.”

US tariff challenges – what UK exporters need to know

“Transatlantic business relationships have challenges and opportunities, and both need a strategic response,” says Jason Alexander, Enterprise Leader for the Industrials practice at RSM US.

In conversations with clients, it’s clear that some of the biggest issues are around how to apply for refunds on tariffs paid, partly because of this challenge around correctly identifying components. It’s affecting innovative UK pharma and life sciences companies, as well as leading manufacturers who have operations in the US and are importing raw materials from the UK and elsewhere.

Fortunately, some US customs and border protection (CBP) administrative mechanisms could apply here, including firms having about 314 days to adjust the import declaration, providing the entry hasn’t been liquidated.

This is called a post-summary correction (PSC) to your entry,” says Mark Ludwig. “So, if you need to change a classification, you’ve almost a year to make it final and correct. If you’re out of this period, then you can still file what’s known as a ’protest’, but it’s a much tighter regime. You can also pursue a formal prior disclosure to communicate errors or issues that affect imports, past or present. This voluntary reporting of violations before CBP starts an investigation means that, if it’s accepted, you can pay tariffs without fines or penalties.

Strategic supply chain responses to US tariffs

Another common issue US tariffs create is how to adjust supply chains and build fluidity to accommodate future tariff regime changes. Some of the challenges here include the technology underpinning the supply chain, like hard-and software compatibility, and related cybersecurity considerations.

There are other risks, too. This includes firms scrambling to manage the impact of tariffs and adopting the wrong approach. That could prompt later enforcement activities, potentially making criminals of the business’s officers, and hefty fines for non-tariff compliance.

“One consequence of increasing tariffs is the long tail of enforcement activities ahead of us, which will have the effect of getting companies to conform,” concludes Mark Ludwig. “We can see this on the Section 232 tariff on aluminium under the Executive Order from earlier this year. Penalties are the maximum allowed in law, with no mitigating factors permitted. This is a very different position to where US importers were a year ago. The level of severity is so much greater. So, it pays to understand what’s at stake and what it means for your business.”

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