UK businesses need to brace for supply chain disruption warns BDO
Commenting ahead of president-elect Trump’s inauguration on 20 January, Matthew Clark, international trade partner at accountancy and business advisory firm BDO said:
“The return of Donald Trump to the White House will be a defining moment for global trade. The imposition of higher tariffs to advance US domestic and foreign policy objectives will have significant repercussions across the world – and UK businesses won’t be immune.
“While Canada, Mexico and China have been earmarked for the most significant tariff hikes, tariff increases of 10%-20% on goods imported into the US from all other countries have also been proposed.
“While some tariff changes are likely to be introduced shortly after the inauguration, others will require the support of Congress and may need to see off any eventual challenge from the WTO.
“While it’s unclear as to how many of the incoming Trump Administration’s tariff proposals will eventually be enacted, UK businesses will need to understand and prepare for new trade dynamics that could lead to supply chain disruptions, increased costs, higher administrative burdens and increased tax complexity.
“Businesses won’t be able to rely on the certainty of traditional trade relations as the imposition of tariffs by the US could result in retaliatory action by some jurisdictions.
“UK companies exporting to the US will need to consider taking proactive measures now such as confirming the correctness of their goods classification and verifying the true country of origin for their goods shipped to the US.
“There may also be important transfer pricing implications so finance directors will need to do some careful modelling to understand the implications of potential tariff changes on related party transactions for goods imported into the US.
“Ultimately, businesses may also need to consider their wider supply chain and operational footprint – including changing the territory of their sourcing and/or manufacturing activities.
“BDO’s latest survey revealed that supply chain pressures are already topping the list of challenges facing UK businesses going into 2025. We anticipate that this issue will rise further up the board agenda as we move through this year and beyond.”
