By Alan Stewart, Partner, MHA, and Andrew Thurston, Customs Duty & Indirect Tax Consultant, MHA
President Donald Trump’s latest statements on potential US trade tariffs have introduced fresh uncertainty for Scottish exporters, particularly those with significant exposure to the US market.
The proposals are linked to escalating tensions over Greenland, where the US administration has expressed strong opposition to the actions of several European nations, including the UK.
For Scottish companies, this makes forward planning essential, especially in sectors where the US remains a key destination for goods, services or components.
Q: What is President Trump threatening to introduce, and when?
President Donald Trump has said he would impose a 10% tariff on “any and all goods” exported from the UK to the US from February 1, with this rising to 25% from June 1 unless an agreement is reached between Washington and Denmark over the acquisition of Greenland. The measures would also apply to Denmark and several European allies, including France, Germany, the Netherlands, Finland, Norway and Sweden. If imposed, the tariffs would be added to those already in place on imports into the US. This is open to change as we eagerly await the US Supreme Court’s decision on the IEEPA (Liberation Day) tariffs imposed by President Trump last year. This may, temporarily, nullify the impact of these threatened tariffs, at least until June.
Q: How are tariffs charged in practice?
Tariffs are collected by the customs authority of the importing country. In the US, duties are collected by Customs and Border Protection at ports of entry, including airports and seaports via an electronically submitted customs declaration. President Trump has persisted in his rhetoric that these tariffs will impact the exporter, but this is simply not the case as the importer bears the responsibility for making payment to the CBP. We have had many discussions with clients who are impacted by these tariffs and it is clear that there is a need for negotiation to manage the impact, for the exporter, importer and the end consumer. Ultimately, costs of goods have increased. It is therefore essential that exporters engage with their US customers to review the impacts of these tariffs to manage their impact in the supply chain.
Q: How are tariffs calculated on specific products?
All commodities are assigned a Harmonised System (HS) code, and it is critical that this classification is confirmed to ensure the correct tariff treatment and overall duty impact are fully understood. In the United States, this classification is expressed through a 10-digit Harmonised Tariff Schedule (HTS) code, which determines the applicable base (ad valorem) duty rate.
In addition to the base duty, blanket tariffs of 10% are added on top of the ad valorem rate through a process known as tariff stacking, whereby multiple duties are applied cumulatively to the same imported good.
Tariff rates also depend on the declared country of origin, which must be supported by appropriate documentation. Errors in classification or origin determination can result in higher duties, penalties, or shipment delays.
Q: What tariffs are currently in place between the UK and US?
The United States currently applies a broad 10% baseline tariff on many UK-origin goods, in addition to existing duties, although the long-term position remains uncertain given the unresolved Supreme Court challenge to the use of the International Emergency Economic Powers Act (IEEPA), as outlined earlier in this article. While some sectors – including steel, aluminium, aerospace and automotive – benefit from limited exemptions or quota-based relief under the 2025 UK-US Economic Prosperity Deal, these arrangements are narrowly defined, subject to ongoing review, and vulnerable to change depending on both legal and policy developments.
Q: What does this mean for the wider economy?
Economists have warned that countries with high exposure to the US market, including the UK, could see economic growth affected if higher tariffs are introduced, particularly if rates rise to 25%.
Q: Could tariffs be applied selectively by sector or product?
Previous US trade measures have shown that tariffs are not always applied uniformly. Whether certain Scottish exports face exemptions, quotas or differentiated rates remains unclear and will depend on how any final policy is structured.
If the Supreme Court ultimately finds that the IEEPA-based tariffs are unlawful, it is our opinion that the US administration could shift to sector-specific measures under Section 232, which governs national security and has previously been used to target steel and aluminium. This would likely lead to higher, more targeted tariffs that could remain in place for longer and create deeper, more sustained disruption for affected sectors, potentially altering the long-term trade relationship between the UK (and Scotland) and the United States.
Q: How quickly could tariffs be implemented or withdrawn?
One of the challenges for businesses is the speed at which trade measures can change. Tariffs can be announced, amended or paused with limited notice, creating operational and financial risk for exporters with goods already in transit.
Q: What happens to contracts already in place?
It is not yet clear how existing commercial agreements would absorb additional tariff costs. Contract terms around pricing, delivery and force majeure may become increasingly important if trade conditions change.
Q: Could retaliatory or secondary trade measures follow?
Trade actions rarely exist in isolation. Further responses from affected countries or shifts in wider trade relationships could introduce additional complexity for Scottish businesses operating internationally. However, from a UK perspective, Prime Minister Keir Starmer said earlier this week retaliation would be wrong, and that the UK Government are not currently considering retaliatory tariffs on the US. Instead, he is urging calm discussions.
Q: How might tariffs affect investment decisions?
Uncertainty around access to the US market may influence decisions on capital investment, hiring or expansion, particularly for Scottish firms with growth plans linked to exports.
Q: Is this a short-term disruption or a longer-term shift?
Businesses will be watching closely to determine whether tariff threats represent a negotiating tactic or a more sustained change in US trade. We expect that abrupt tariff measures will remain a recurring concern for companies trading with the United States for the duration of President Trump’s term.
Q: How can MHA advisers support businesses?
We can help businesses assess financial exposure, model different tariff scenarios and understand cash-flow implications. Customs and indirect tax specialists can review product classifications, origin rules and supply chains to ensure compliance and identify potential efficiencies or reliefs.
Alan Stewart, a tax partner in MHA’s Aberdeen office, supports clients with an international footprint on a wide range of commercial and tax matters.
Andrew Thurston, Customs Duty & Indirect Tax Consultant at MHA, brings more than 20 years’ experience from HMRC’s Customs and Excise departments and advises UK and EU businesses on optimising their supply chains from a customs perspective. MHA is one of UK’s leading accountancy firms and has an office in Edinburgh.
For more information, www.mha.co.uk
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