Welcome to our May 2025 market update. As your trusted freight forwarding partner, we’re providing this roundup of key developments that continue to impact global supply chains.
April has seen significant developments across the international trade landscape that will impact many UK businesses.
From new tariff suspensions benefiting British importers to major shifts in US trade policy, dramatic changes to GB-NI shipping requirements, and substantial new government support for exporters – the global trade environment continues to evolve rapidly.
US-China Trade War Intensifies with Record-Breaking Tariffs
The international trade landscape has been dramatically reshaped by recent developments in US trade policy. In a series of escalating moves:
President Trump initially announced sweeping global tariff increases in early April, with a baseline 10% hike for most nations and significantly higher rates for targeted countries (54% for China, 20% for EU).
What followed was an unprecedented tit-for-tat exchange with China that has resulted in Chinese imports now facing an extraordinary 125% duty rate in the US, while American products entering China are subject to 84% tariffs.
In an unexpected turn, the administration postponed the implementation of additional country-specific tariffs for all nations except China for 90 days. This means most countries currently face only the baseline 10% increase that went into effect on April 5th.
The situation has created significant market volatility, with global stocks initially tumbling before rallying after the postponement announcement.
This rapidly evolving trade conflict has major implications for supply chains, pricing strategies, and market access. Businesses with connections to US-China trade or those considering the US as an export market should review their strategies in light of these developments.
Our international trade specialists can help you assess exposure to these tariffs and develop contingency plans to navigate this uncertain environment. Contact us for a consultation on protecting your business interests amid these trade disruptions.
UK Tariff Suspensions: How Businesses Are Benefiting
The UK Government’s recent suspension of import tariffs on 89 everyday and seasonal products is already delivering cost savings for businesses. Running until June 2027, these suspensions are expected to save UK businesses at least £17 million annually.
“These tariff suspensions came at a crucial time for many UK businesses facing increasing operational costs,” notes our Director, David Hooper. “We’re seeing clients redirect savings toward expanding production capabilities, potentially creating new jobs.”
The exemptions cover summer essentials (garden products), food items (pasta, fruit juice, coconut oil), and industrial materials (plywood, aluminium cans). Based on our analysis, several sectors are benefiting significantly – from consumer goods manufacturers and seasonal retailers to food processors and tech manufacturers.
IFS is helping businesses navigate these changes by ensuring correct application of suspensions and restructuring import patterns to maximize savings. For expert guidance on how these changes might benefit your business, contact us.
£20 Billion Export Finance Boost for UK Businesses
The government has announced a significant package of support for UK businesses facing trade challenges in the current unstable global environment. The multi-billion-pound increase in government-backed financing aims to provide stability and certainty for British exporters.
Key elements of the support package include: A £20 billion expansion of UK Export Finance (UKEF) capabilities to increase financial support for British exporters Access to loans up to £2 million for small businesses through the British Business Bank’s Growth Guarantee Scheme Partial loan guarantees through more flexible uses of UKEF’s Export Development Guarantee Allocation of up to £10 billion specifically for businesses significantly impacted by current trade disruptions A £500 million expansion of the Growth Guarantee Scheme providing 70% government-backed guarantees against loans This announcement forms part of the government’s broader growth strategy and Plan for Change, coming alongside other recent initiatives including support for British Steel, flexibility on zero-emission vehicle mandates, and investments in health data research.
Both the Chancellor Rachel Reeves and Business Secretary Jonathan Reynolds have emphasized the government’s commitment to backing British businesses in a changing world trade environment.
Our team can help you understand how to access these support mechanisms and maximize the potential benefits for your business. Contact us to discuss your specific needs and explore the available options.
New GB-NI Parcel Shipping Rules Now in Effect
As of 1st May, significant changes to customs processes for businesses shipping parcels from Great Britain to Northern Ireland have come into effect.
Key changes now in place: B2B parcels require additional information submission via the Customs Declaration Service (CDS) The UK Internal Market Scheme (UKIMS) offers a streamlined option for eligible goods, but businesses must have applied for authorisation B2C parcels maintain simpler processes with no individual customs declarations required, but businesses must clearly identify customers as businesses or consumers These changes impact businesses across the country.
If you haven’t yet adapted your shipping processes, our team is ready to provide immediate guidance and support to ensure your shipments remain compliant and delay-free. Contact us today to navigate these new requirements.
Government Reviewing £135 Low Value Import Relief
The Chancellor has announced a review of the customs treatment for Low Value Imports, which currently allows goods valued at £135 or less to be imported without paying customs duty.
This review responds to concerns from major UK retailers including Next, Sainsburys, Currys, and Associated British Foods, who argue the exemption creates an unfair advantage for overseas competitors who can sell directly to UK consumers without paying the same duties as domestic businesses.
HM Treasury will begin engaging with stakeholders next month to assess the impact on UK consumers and businesses. The review is part of the government’s broader effort to “maintain a level playing field for British business” and tackle practices that undercut fair trade.
For businesses that import or compete with imported low-value goods, this potential policy change could significantly impact operations and pricing strategies. Our team is monitoring these developments closely and will provide guidance on how to prepare for potential changes.
Trump Softens Auto Tariffs While Maintaining Pressure on China
President Trump will issue an executive order this week providing targeted relief from his 25% vehicle tariffs, responding to intense industry pressure. The plan includes: Credits worth up to 15% of domestically assembled vehicle values (equating to duty-free parts imports of 3.75% of vehicle price in year one, 2.5% in year two) Exemption from other Trump tariffs on Canadian/Mexican goods and steel/aluminum Extension of duty-free status for USMCA-compliant North American parts Crucially, Chinese components receive no relief and will continue facing combined tariffs exceeding 145%.
Industry leaders have cautiously welcomed these changes, though uncertainty persists—highlighted by GM’s decision to pull its annual forecast until final tariff details emerge.
Additional points importers should note: Both new and used vehicles remain subject to Section 232 duties (except those 25+ years old) Auto parts tariffs take effect May 3, 2025 US-origin products remain exempt Our specialists can provide guidance on duty mitigation strategies and supply chain restructuring to navigate these complex changes. Contact our team for a tailored assessment.
As we move into May, we remain dedicated to providing you with reliable, cost-effective logistics solutions tailored to your business needs. Our team continuously monitors market developments to help you navigate disruptions and capitalise on opportunities in the coming months.
Thank you for your continued trust and partnership. We look forward to supporting your supply chain success throughout 2025.
Please contact us with any questions about these updates or for assistance with your freight requirements.
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