Tariffs and the trade and workforce pressures for UK businesses
The US has signalled tariffs on imports from the EU and other trading partners amid ongoing discussions linked to Greenland. While the detail and timing remain uncertain, the announcements have already created pause for thought for internationally active UK businesses.
Tariffs of this nature can impact costs, established supply chains, and workforce planning. For UK companies operating across borders, these effects extend beyond customs duties into tax structuring, cashflow management, and employee mobility.
Matthew Fox, Tax Partner, highlights the immediate operational impact from a global mobility perspective.
“From a global mobility perspective, increased tariffs place pressure on businesses raising costs, disrupting supply chains and affecting the movement of employees. Companies may respond by relocate production or reducing expenditure, leading to workforce adjustments and changes in work locations or duties,” Matthew says.
“Where employee relocations occur in a higher-tariff environment, employers may face increased relocation costs including shipping personal belongings, travel expenses, and potentially higher living expenses in the destination country.”
Matthew’s comments underline how tariff-driven decisions can feed directly into people costs and employment risk, particularly for businesses with mobile workforces or cross-border production models.
Mark Tan, International Corporate Tax Partner, points to a broader shift in how trade policy now operates.
“The threatened tariffs illustrate how trade measures are increasingly being used as strategic instruments rather than predictable economic policy. They are announced, dialled up, or paused not because they improve economic outcomes, but because they create leverage over where companies operate.”
From an international tax and trade perspective, Mark stresses that location choices still carry significant weight.“From an international tax and trade perspective, this is a timely reminder that geography still matters. Supply chains are the bloodline of profitability: where value is created and, ultimately, where profits are taxed. Even the threat of tariffs introduces fresh scrutiny over where goods are sourced, where value is added, and where profit sits. Tax location and trade origin are not the same thing, and the distinction is often misunderstood. I see this confusion regularly. A business can be impeccably structured from a tax residence perspective yet still be exposed to tariffs because of where goods are manufactured or substantially transformed.”
Mark also contrasts the current environment with earlier trade regimes that businesses could plan around with greater confidence.
“Historically, trade policy, including tariffs, was at least nominally about economic efficiency. Tariffs were used to protect specific domestic industries or to raise revenue, and they sat within trade frameworks that businesses could plan around. Automotive tariffs, agricultural duties, and textile quotas were rarely surprises. Companies knew the rates, understood the rules of origin, priced them into contracts, and structured supply chains accordingly. The system might not have been frictionless, but it was stable.”
“What we are seeing now is different. Tariffs are increasingly deployed as a bargaining chip. They are announced, threatened, paused, or targeted not because they improve economic outcomes, but because they create pressure: pressure on counterparties, pressure on allies, and pressure on companies to relocate activity, change sourcing, or support wider strategic objectives that have little to do with cost or efficiency.”
For UK businesses with international exposure, preparation now plays a central role.
“For internationally exposed UK businesses, my consistent response has been preparation through a disciplined Tax Operating Model that integrates tax, trade, and supply-chain strategy. Understanding where real trade exposure sits, separating tax risk from customs risk, and stress-testing operating structures against trade friction are no longer optional, but core elements of international structuring and decision-making.”
Read more in 9am Business; TechRound; and Bridging Soup
