Understand the origin of your goods
Businesses that export to the US—particularly those operating in both the UK and EU—must understand the origin of their goods to determine any additional duty owed by US importers. They must also be aware of the Windsor Framework in case further EU tariffs are placed on US imports.
Tariffs are based on the country of origin, not the country of export. The country where production or last significant transformation occurred determines which tariffs apply when importing into the US. If the US reinstates its reciprocal duty rates, Northern Ireland goods could gain a competitive edge if subject to lower tariffs than EU goods.
Adapt to the evolving trade landscape
Companies must stay informed as trade conditions change, assess risks to their supply chains and take steps to minimise disruption.
Opportunities exist in this shifting environment. Businesses might explore mergers and acquisitions, strengthen supply chain resilience, enter new markets or build strategic partnerships to improve competitiveness.
Tackle rising costs and complexity
The most immediate challenge is rising costs. A 10% tariff on exports to the US could increase expenses for US importers and, ultimately, consumers. If the EU imposes retaliatory tariffs on US goods, Northern Ireland firms importing from the US may also face higher costs.
Dual market access means Northern Ireland businesses must pay EU duty on US imports, not UK duty. This distinction adds complexity, especially for firms with cross-border supply chains where different duty rates apply.
A relatively new system allows businesses to reclaim EU tariffs on US imports that remain in the UK. However, this process involves a high evidence threshold and creates both administrative burden and cash flow pressures.
Plan amid economic uncertainty
Tariff unpredictability makes long-term planning difficult. Stable conditions support pricing strategies and business decisions, but fluctuating rates complicate customer negotiations. Added uncertainty around potential future retaliation makes these challenges worse.
Prepare for sector-specific impacts
Certain industries—like manufacturing and agri-food—are particularly exposed. Manufacturing NI CEO Stephen Kelly has noted that the region’s manufacturers are bracing for increased disruption.
To inform its response, the UK government has asked businesses to share details on the value of their US imports, the effect of potential tariffs and how they might adapt.
Take strategic action
Although many businesses have adopted a “wait and see” approach, now is the time to act. A structured, strategic response is vital.
Review origin and classification
As mentioned earlier, origin and classification codes are key. Goods sourced and manufactured solely in Northern Ireland or the UK usually have straightforward origin status.
Issues arise when components come from multiple territories or significant processing occurs elsewhere. For example, goods of Chinese origin face much higher US tariffs. Origin is based on where substantial processing happens, not where the product is shipped from.
Firms should also review goods imported from the US to assess whether they’re affected by EU retaliatory tariffs. Understanding how EU duty applies—and what documentation is needed to reclaim it—is essential for goods that remain in the UK.
Align customs and tax reporting
Tariffs affect transfer pricing. When a multinational’s overseas affiliate sells to its US entity, the tariff becomes part of the transfer price. Customs and tax reporting must match. If businesses unbundle royalties or services from the product price to lower customs value, they must align these changes with transfer pricing policies and document them properly to avoid penalties.
Use customs procedures to reduce exposure
Special customs procedures—such as Inward and Outward Processing Relief—may be available to mitigate EU retaliatory tariffs. Eligibility depends on the supply chain setup and requires authorisation from HMRC. Robust internal processes are needed.
Similar procedures might exist in the US for goods undergoing processing before re-export.
Rethink supply chains
Businesses should review their current supply chains for exposure to US imports and exports. Exploring alternative markets or suppliers in lower-tariff regions could help reduce risk.
Adjust pricing and brand strategy
The current environment may prompt a rethink of pricing and brand positioning. Companies could raise prices on affected products while keeping others steady to maintain overall value perception.
Stay informed and act quickly
It may seem obvious, but staying updated on further changes is critical. At the time of writing, future developments remain unclear. Monitor updates closely and take swift action where needed. And, as always, seek expert advice to support your decisions.
