For UK businesses exporting to the United States, the trade landscape of 2025 feels less like a “special relationship” and more like a strategic minefield with no real benefit to UK business owners. With the new US administration’s trade policies now in full swing and the echoes of the UK’s own recent general election still settling, certainty is a scarce commodity. Punitive tariffs, some new and some relics of previous administrations, continue to threaten the viability of British goods in their largest single export market. This issue is impacting just about all businesses that import/export from the US.
But while the headlines focus on political deadlock, a growing number of British firms are refusing to be passive victims. They are actively deploying creative, resilient, and sometimes radical strategies to navigate the tariff wall. This isn’t about waiting for a free trade agreement; it’s about taking control now, before their businesses go under.
Here are five proven strategies UK businesses are using to not just survive, but thrive, in the face of US protectionism.
- Market Diversification: Don’t Put All Your Eggs in One American Basket
The most direct response to a blocked path is to find a new one. Savvy exporters are aggressively reducing their reliance on the US market by leveraging the UK’s newer trade blocs. This approach is being undertaken by Lottie Neil, founder of Mobalite Mobility Scooters: “we’ve had to stop exporting our scooters to the States for the time being. In the past we had a healthy customer base across the pond, but it’s just too expensive for us to ship there now. This means more marketing to our local market, which is the UK”.
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the UK formally joined in 2024, is no longer a theoretical opportunity—it’s a lifeline. Markets like Japan, Australia, and Mexico are proving hungry for high-quality British products.
Case in Point: Derbyshire Spirits, a craft gin distillery, saw a 25% tariff slapped on their flagship product in late 2024, making them uncompetitive in key US states. “Our American dream turned into a nightmare overnight,” says founder Eleanor Vance. “We pivoted hard. Using the CPTPP framework, we secured new distributors in Tokyo and Melbourne. The tariff-free access meant we could compete on quality and price. Japan now accounts for 15% of our exports, a figure that was zero two years ago.”
- Action Point:Use the Department for Business and Trade’s (DBT) “Check How to Export Goods” tool to compare tariff rates and rules of origin for CPTPP member countries versus the US.
- Tariff Engineering: The Art of the Code
This is a highly technical but powerful strategy. Tariffs are applied based on specific Harmonized System (HS) codes, which classify goods in minute detail. By legally modifying a product, its components, or its state of assembly at the point of import, a business can shift it into a different classification with a lower or even zero tariff.
Case in Point: Cotswold Cycles, a manufacturer of high-end electric bicycles, was facing a steep tariff on fully assembled e-bikes. Their solution was to “tariff engineer” their shipping process. They now ship their bikes and the lithium-ion battery packs in separate consignments. The final, simple assembly is completed by their US distribution partner. The bike frame falls under one HS code and the battery another, completely avoiding the punitive tariff on the finished product.
- Action Point:Consult a customs broker or trade compliance specialist. A small investment in their expertise can reveal opportunities to reclassify your product and save you a fortune in the long run.
- The Price Point Dilemma: Absorb the Hit or Ask the Customer?
When a tariff hits, the immediate financial question is who pays for it. There’s no easy answer, and the right strategy depends entirely on your product and brand positioning. We speak to Tony Batt, founder of Eldercroft dementia care home who said “people think these tariffs are only on Whiskey and electronic goods, but the ripple effect of these tariffs hits everyone. In the care industry, these specialist care equipment items are priced at an all time high. This is due to higher manufacturing costs, which unfortunately get passed on to the end customer”.
- Absorbing the Cost:Companies with healthy margins or those desperate to maintain market share are choosing to absorb the tariff, effectively taking a significant hit on their profitability per unit. It’s a risky long-term strategy but can prevent a mass exodus of customers.
- Passing the Cost On:Premium, niche brands with loyal customers are often able to pass most of the cost on. This protects their margins but risks pricing them out of the market, especially if US domestic alternatives exist.
Case in Point: Northern Textiles, a heritage brand selling luxury wool throws, faced this exact choice. They opted for a hybrid model. They absorbed half of the 15% tariff and passed the other half on, communicating transparently with their US customer base about “navigating new international trade costs.” Their loyal customers understood, and the sales dip was minimal.
- Action Point:Before making a decision, conduct a price elasticity study for your product in the US market. How sensitive are your customers to a 5%, 10%, or 15% price increase?
- Go Local: Establishing a US Foothold
For businesses with significant US sales, the ultimate tariff-proofing strategy is to move part of their operation inside the tariff wall. This doesn’t necessarily mean building a giant factory. It can be a “light-touch” final assembly, packaging, or distribution hub. By importing components (which often have lower tariffs than finished goods) and completing the final product on US soil, companies can legally label it “Assembled in USA” and bypass the import tariff entirely.
Case in Point: Birmingham Advanced Components, a maker of specialist parts for the automotive restoration market, saw tariffs threatening their business with US garages. In 2024, they opened a small assembly and distribution facility in South Carolina. They ship components in bulk from the UK and perform the final quality checks and assembly in the US, drastically reducing their tariff burden and shortening delivery times for their customers.
- Action Point:Investigate state-level incentives for foreign direct investment. Organisations like SelectUSA can provide information on which states offer tax breaks or grants for setting up a local presence.
- Collective Lobbying & Leveraging Government Support
While a single SME can’t bend Washington’s ear, a unified industry voice can. Trade associations like the Food and Drink Federation, the Society of Motor Manufacturers and Traders (SMMT), and techUK are constantly lobbying both the UK and US governments on behalf of their members. They provide data, impact assessments, and a coordinated message that is far more effective than a lone voice.
On the home front, the Department for Business and Trade (DBT) remains a crucial resource. Their Export Support Service offers practical advice, and UK Export Finance (UKEF) can provide loan guarantees and insurance against the risks of unstable markets.
- Action Point:Join your industry’s primary trade association. Actively participate in their trade policy committees and make sure your specific challenges are included in their lobbying efforts.
The message from the front lines of UK export is clear: waiting for political winds to change is not a strategy. The businesses that will thrive in this new era are those who see tariffs not as an impassable wall, but as an obstacle to be navigated with creativity, agility, and strategic foresight.
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