Just days after global markets plunged and UK exporters braced for a new wave of tariffs, President Trump has abruptly reversed course – partially.
On Wednesday, the US administration announced a 90-day pause on tariffs for over 75 nations, offering temporary relief from the import duties introduced earlier this month.
However, this concession is far from a return to stability.
The 10 per cent baseline tariff on all UK imports remains in place, while tariffs on Chinese goods have been escalated sharply to 125 per cent, fuelling what many are calling a full-scale trade war between the world’s two largest economies.
As we highlighted in last week’s blog, the new US tariff regime already poses challenges for UK exporters, especially small and medium-sized enterprises (SMEs), which account for 59 per cent of British businesses trading with the US.
That hasn’t changed. What has changed is the level of global uncertainty, and the need for firms to prepare for multiple potential scenarios.
What does the 90-day pause actually mean?
The temporary suspension applies only to certain countries and sectors, and the UK’s position remains largely unchanged. UK firms are still facing:
- 10 per cent blanket tariffs on all goods entering the US
- 25 per cent tariffs on cars, with additional duties on auto parts to follow on 3 May
- Ongoing political instability in US trade policy, which is increasingly characterised by abrupt reversals and rhetorical volatility
The White House has framed the pause as a negotiating tactic, not a retreat. The US Treasury and President Trump’s spokespeople were quick to stress that the tariff agenda remains very much alive and subject to rapid change.
Market response and business impact
While US and UK stock markets have staged a modest recovery following the announcement, the longer-term outlook remains uncertain. Here’s what businesses should consider now:
- Volatility is here to stay – The political nature of tariff decisions in the US means future changes could come with little warning. Businesses exposed to the US market must build flexibility into both pricing and supply chain strategies.
- Cost pressures will ripple through the supply chain – Even firms with no direct exposure to the US may feel the effects through increased input costs, shipping rates, or supplier disruptions.
- Investment and pensions may be affected – Most UK pension schemes have some exposure to global equities. Sharp movements in US markets can impact long-term retirement planning.
What UK businesses should do next
In this climate, a wait-and-see approach is not an option. UK exporters and importers must remain proactive and ready to adjust. We recommend:
- Reviewing exposure to the US – Quantify the direct and indirect risks your business faces from US tariffs and global market shifts.
- Engaging with advisors early – Strategic tax and financial planning can help offset some of the cost impacts, including exploring relevant UK reliefs or restructuring supply chains.
- Keeping a close eye on negotiations – While the UK Government continues to negotiate with Washington, businesses must monitor developments closely and be ready to act as new policies emerge.
- Stress-testing financial resilience – Rising costs and squeezed margins could strain cash flow. Make sure your business has the liquidity and agility to weather further shocks.
A time for cool heads and clear planning
As one Government source noted this week, the 90-day pause “vindicates a cool and calm approach.” The same applies to businesses.
We encourage our clients to stay informed, plan, and work closely with advisers to manage uncertainty.
Contact our international trade and tax specialists today for advice.
Reanda UK is a subsidiary of leading independent accountancy firm Grunberg & Co Limited. Our aim is to help businesses and individuals to navigate the UK’s world-renowned business and tax infrastructure, and to support them with their international ambitions. To find out how we can help you, please contact us.