Tariffs
What are import tariffs and how do they work?
If you are new to importing and exporting, you will have been hearing a lot more about Tariffs in the news lately, in particular, Trump's Tariffs.
Below, you will find information and guidance on what import tariffs are and how they may apply to you.
What Are Import Tariffs?
A tariff is a duty (tax) imposed by a national government or customs territory on imports (or, exceptionally, exports) of goods.
The duty amount is determined by the commodity code (HS code), more information on commodity codes can be found within the website, click here to be taken to the page.
Why Do Import Tariffs Exist?
Import tariffs are a source of revenue for the country they are being imported into. It is a method of raising income for local governments.
Aside from this, it is also a way of regulating foreign trade, encouraging consumers to buy products within the domestic market, within their own country, and therefore stimulating their economy.
Can Import Tariffs Cause Inflation?
Yes, import tariffs can contribute to inflation as they increase the cost of imported goods, which businesses may then pass on to consumers in the form of higher prices.
While tariffs are likely to cause at least a temporary rise in inflation, the effects could be more persistent, depending on the extent and duration of the tariffs.
​Tariffs can also have other economic impacts, such as slowing down global growth and potentially leading to trade wars.
Do Import Tariffs Change?
Import tariffs, or customs duties, in the UK are updated regularly, with the UK Trade Tariff data changing on average every 3.8 days, reflecting new trade policies and Free Trade Agreements (FTAs).
Businesses need to stay informed about these changes to comply with new requirements or take advantage of new preferential rates.
How will Trump's Tariffs affect the UK?
US President Donald Trump has confirmed a 10% tariff was being imposed on US imports of UK goods – the same level as the global "baseline" he was setting for countries around the world.
Meanwhile, a 25% import tax has been confirmed for steel, aluminium, and cars.
According to the Federation of Small Businesses, currently, 59% of small UK exporters sell into the US market, these tariffs could pose serious damage to the growth of these small business.
The rise in import tariffs will be accounted for by the US importer, which may well be passed on to the end consumer however, these additional expenses may make it particularly difficult for UK exporters to remain competitively priced.