President Trump’s decision to charge import duties for low-value goods entering the US is bad news for small exporters in the UK.
All goods worth $800 or less entering the US from the UK will no longer be exempt from US tariffs from 29 August. Trump had previously announced that the US would keep its de minimis tariff threshold until July 2027.
William Bain, head of trade policy at the British Chambers of Commerce (BCC), said: “This development has been coming for several months but is still a major blow to UK exporters to the US. Smaller firms and sole traders, who have invested strongly in e-commerce sales internationally, will be worst hit."
However, he added that “the UK is in a comparatively advantageous position in terms of these additional duties compared with those faced by other countries. The EU is also likely to scrap its de minimis threshold by 2028, and the UK government is launching a review into removing the threshold here too. There are still great opportunities, both in the US market and other markets globally for UK goods, but SMEs will need to rethink their sales and distribution plans to deal with these added duties.”
David Jinks, head of consumer research at Parcelhero, said: “Many UK-based exporters of products valued at $800 and under will be taken by surprise by the change. So-called low-value packages will now be subject to the same country-specific tariffs as larger shipments.”
However, there are some reasons to be optimistic, Jinks added. “The UK is one of the few countries to have reached a trade deal with the US. The terms of the UK’s deal are reasonably favourable compared to the tariffs many other nations face. Under the terms of the deal, UK-produced goods now attract a 10% tariff when they arrive in the US whereas, currently, Brazil is facing tariffs of up to 50%. Good deal or not, however, the fact is that all lower-priced UK-produced goods will potentially cost US shoppers more from 29 August than they pay today.”
Small businesses lose appetite for exporting
A survey by SME lender Iwoca has found that over half of UK small business owners (56%) say that US tariffs have reduced their appetite for exporting. The findings also indicate that UK SMEs show a strong preference for EU trade ties (72%) over US ties (27%), reflecting concerns about US tariff policies under Trump.
“Tariffs add complexity for any business looking to trade internationally - and for small businesses, even a slight increase in costs or red tape can tip the balance. SME owners tend to be open-minded and opportunity-driven, but they also work with tight margins and limited time.These findings show that while many SMEs are open to exporting, trade policies like tariffs can quietly shut the door before it’s even opened.” Mark Di-Toro, director at Iwoca.
The question remains, could the recent US-EU trade deal actually deliver new opportunities for the UK? Aman Parmar, head of marketing at BizSpace, said: “SMEs now have a unique opportunity to thrive in the UK, particularly in light of the evolving international trade dynamics linked to recent US tariffs on the European Union. The UK currently finds itself in a favourable position, having established trade agreements with both the US and the EU, which allows SMEs to capitalise on a distinctive business environment that has emerged since Brexit.”
Written by Rachel Miller.