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This article is provided by BRC Associate Member, DLA Piper.

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DLA Piper trade lawyer and head of UK Government Affairs team, Paul Hardy, sets out the impact of US tariffs on the UK retail sector, and outlines measures British retailers should consider taking to manage their exposure to geopolitical risk. 

US Tariffs and the UK Government response  

In the first week of April 2025, the Trump Administration announced a range of tariffs, including: 

  • 10% global tariff on imports into the US, which came into effect on 5 April 2025. 
  • Tariffs of 145% on Chinese imports, which was met by a 125% retaliatory tariff by China on US goods, leading to a 60% reduction in the number of cargo ships travelling from China to the US in April (CNN). Following negotiations between the US and China, from 14 May 2025, US tariffs have been reduced to 30% on Chinese goods and reciprocal Chinese tariffs to 10% on US goods. 
  • Higher suspended tariffs on 60 trading partners, including the European Union and countries in south-east Asia with significant manufacturing industries such as Vietnam, Cambodia and Japan. These tariffs were suspended for a 90-day period – and will face a further review or come into effect on 9 July 2025. 

In response, the UK Government has taken a number of measures aimed at easing cost pressures for British businesses.

Last month, the Department for Business and Trade suspended import tariffs on 89 products, in a temporary move set to run until July 2027.  The suspension primarily applies to products including pasta, fruit juices, spices, coconut oil, pine nuts, plywood and plastics and is estimated to save British businesses at least £GBP17 million annually. The tariff cuts are especially relevant for retailers in the food and drink sector, as many of the listed items are key ingredients or packaging components. 

The Chancellor has also announced a review of the Low Value Imports regime, which enables businesses to send parcels with goods below GBP135 to customers in the UK without paying the tariff on that good. This is in response to calls from the British Retail Consortium members and other businesses, highlighting the risk of trade diversion and "dumping", as goods intended for the US, but facing large tariffs, are redirected to alternate markets such as the UK. 

Impact on UK retail 

The impact of US tariff policy is being felt unevenly across the UK's retail sector, but few businesses remain untouched. 

In the luxury sector, tariffs have tempered expectations of a 2025 rebound driven by the US and multinational fashion and accessory businesses seeing stock declines.  

Apparel and footwear brands face even more acute pressure. The US regime has targeted key manufacturing hubs. Uncertainty remains over whether the Trump Administration will implement significant further tariffs on other countries in the APAC region including Vietnam, Cambodia and Bangladesh on 9 July 2025. Without appropriate preparation, retailers risk availability issues and disruption while supply chains are re-routed. 

Supply-chain mitigation strategies – what can you do? 

Supply chain mitigation strategies can be divided into short- and long-term. There should, however, be a connection between the two: we advise that the short-term fixes should have the potential to give rise to longer-term solutions.  

Contingency planning includes: 

  • Risk-mapping: Review the vulnerability of supply chains to geopolitical trade disputes over five to ten years and quantify the risk. Think upstream: How will tariffs affect second- and third-tier suppliers? Draw up and maintain a supply-chain risk map. 
  • Government engagement on potential product and sector exemptions from retaliatory tariffs. 
  • Stockpiling: Consider importing goods before tariffs are applied and stockpiling in importing jurisdictions. 
  • Lowering supply-chain costs: 
    • Origin analysis: consider whether further manufacturing by second- or third-tier suppliers can result in a beneficial change of origin in final products. 
    • Raw material versus semi-finished products: If third-country inputs into manufacturing processes are attracting tariffs on imports, consider whether importing those inputs as semi-finished products – thereby incurring a change in commodity classification – lessens the tariff impact. 
    • Customs valuation: consider whether/how the valuation of your imports can legitimately be lowered, e.g. by transfer pricing changes. 
    • Contract renegotiation: consider whether tariff costs can reasonably be shared along the supply chain, rather than being solely paid by the Importer of Record. 
  • Price reviews: consider whether costs can be cut in the supply chain or have to be passed on to the consumer; consider whether price elasticity provides new opportunities for competitive advantage in import markets. 
  • Evaluating insurance: Consider the value of trade credit insurance.
  • Diversifying supply chains: For the longer term, consider developing an alternative source of supplies from jurisdictions less likely to be exposed to geopolitical trade disputes. An analysis of preferential trade agreements is essential in this process. 

How DLA Piper's Trade and Government Affairs team can help 

At the interface of law, business, politics, and global trade, the DLA Piper International Trade and Government Affairs team can help you assess and mitigate your risks, including by: 

Analysing supply-chain risk in both geopolitical and international trade contexts and implementing effective supply-chain mapping and risk mitigation strategies; and 

Engaging with government on your behalf to seek product or sector exemptions, making use of the team's trade knowledge and political experience. 

For further advice and support on how to position your business in this fast-moving trade environment, please contact Paul Hardy from the DLA Piper International Trade and Government Affairs team.

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