As the inauguration of President-Elect Donald Trump approaches on January 20, UK businesses are being urged to prepare for potential supply chain disruptions and increased trade costs as a result of anticipated tariff hikes.

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According to Matthew Clark, international trade partner at BDO, the return of Trump to the White House marks a pivotal moment for global trade, with proposed tariff increases set to impact businesses worldwide, including those in the UK.

While Canada, Mexico, and China have been identified as the primary targets for significant tariff hikes, Trump’s trade policies could also see tariff increases of 10%-20% on imports from other countries, including the UK. Some of these changes could be enacted shortly after the inauguration, while others may require congressional approval and face potential challenges from the WTO.

“The imposition of tariffs by the US could result in retaliatory action from other jurisdictions,” Clark warned. “UK businesses will need to understand and prepare for these changes, which could lead to higher costs, administrative burdens, and increased tax complexity.”

To navigate these uncertainties, UK companies exporting to the US should take proactive steps, including:

• Reviewing goods classification to ensure compliance with evolving trade regulations.
• Verifying country of origin for goods exported to the US to avoid unexpected tariff penalties.
• Assessing transfer pricing implications to understand the financial impact on transactions involving goods imported into the US.
• Reevaluating supply chains by considering alternative sourcing and manufacturing locations.

A recent BDO survey revealed that supply chain disruptions are already among the top challenges facing UK businesses in 2025. As uncertainty looms over future US trade policies, Clark predicts that mitigating supply chain risks will become a key priority for UK businesses throughout the year.

With the potential for higher tariffs, trade complexities, and retaliatory measures, UK companies must act now to ensure they remain resilient and adaptable in an evolving global trade environment.

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