Columnist

How Merseyside firms can navigate US tariff shift

Liverpool’s economy has long thrived on international trade, with strengths in advanced manufacturing, maritime services, food and drink and fast-growing life science and tech sectors. 

However, challenges have arisen in recent months with the US government introducing a baseline ten per cent tariff on UK goods – a levy that will impact many exporters irrespective of concessions secured as part of June’s UK-US trade deal. 

The timing is difficult. Many businesses were rebuilding momentum after Brexit and strengthening transatlantic ties. 

The curveball of new tariffs this year has left Liverpool exporters facing uncertainty.

But uncertainty doesn’t mean inaction.

Merseyside firms have repeatedly demonstrated resilience, whether during the pandemic, global supply chain shocks or Brexit disruption. 

Now more than ever, agility and preparedness are essential qualities for those with international ambitions. 

And in some cases, the ten per cent tariff rate may still compare favourably to competitors such as Norway, which faces a 15 per cent rate on certain goods.

Here are five key tips for businesses to consider in the face of an uncertain trade environment:  

Understand your exposure

Businesses must quickly assess where they are most vulnerable to tariffs. 

High-value or lower-margin exports may come under pressure, while precision manufacturing or pharmaceuticals could see US clients explore alternative suppliers. 

An impact assessment should consider both direct exports and supply chain dependencies, including components from tariff-hit countries.

Re-evaluate supply chains

Mapping the full journey of goods is critical. 

Rising costs anywhere in the chain could squeeze profitability. 

Options include reshoring or diversifying supplier bases to secure more resilient routes.

Revisit contracts

Many agreements were signed in more stable trading times. 

Reviewing contracts to allow for tariff-related cost adjustments or shared-risk provisions will be vital for resilience and avoiding nasty surprises.

Explore mitigation strategies

While detail on the new tariff regime is still being clarified, there are existing mechanisms that can help reduce the impact of these additional costs. 

First Sale for Export has been used effectively in sectors like drinks. 

Foreign trade zones in the US, duty drawback schemes and free trade agreements may all offer opportunities to reduce costs.

Strengthen customs and compliance

Errors in classifications or valuations can be costly. 

Robust review processes or specialist advisers can ensure exporters remain compliant and avoid unnecessary costs.

Stay proactive

Liverpool’s business community has always been outward-looking, from historic trade links through to today’s innovation economy. 

For those that act now, the US remains a market full of opportunity. 

Success will hinge not just on the quality of Liverpool goods and services, but on the agility of the businesses behind them.

Jennifer Lee is Liverpool office senior partner at KPMG UK

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →