Navigating Cross-Border Payments Amid Tariff Uncertainty

This article was last updated on 23 April 2025

Over the past few months, businesses around the world have been preparing for a new reality in global trade.

As uncertainty grows surrounding tariff regulation from the United States (US), businesses across a wide range of industries are looking to adapt their business models and supply chains ⁹ to weather the economic storm. While the United Kingdom (UK) works to negotiate a deal on tariffs on a wide range of goods before a 90 day pause on global tariffs comes to an end, businesses across the country are likely already feeling the indirect impact of international tariffs via currency volatility and inflationary pricing.

The ongoing uncertainty means that businesses that deal with overseas goods, services, suppliers and teams are already looking for ways to adapt to this new normal.

In this article, we’ll break down what recent tariff legislation means for business owners in the UK, how these regulations are impacting currency valuations and how businesses can stabilise their payments infrastructure to navigate through the uncertainty.

What are the latest US tariffs?

As of 23 April, the US has rolled out a 10% 'minimum baseline' tariff on all countries, and paused higher rate tariffs for the European Union and other countries for a 90 day period. Above the 10% base rate introduced tariffs on the following countries and goods:

By industry

Steel

25% tariff on all steel imports

Aluminium

25% tariff on all aluminium imports

Automotives
25% tariff on imports of new automotives into the US. A 25% tariff on car parts is set to take effect on 3 May.

By Country

China

145% tariff on imports from China

Canada

25% tariff on goods that do not satisfy U.S.-Mexico-Canada Agreement (USMCA) rules of origin with a lower 10% tariff on energy products and potash imported from Canada that fall outside USMCA

Mexico

25% tariff on goods that do not satisfy USMCA rules of origin

What are the latest reciprocal tariffs?

As of the date of publication, China and Canada have announced reciprocal tariffs on US goods:

By Country

China

125% tariffs on US goods.¹

Canada

25% tariff on 155B CAD in goods imported from the US.² See the full list of affected products here.

Mexico

Mexico’s president, Claudia Sheinbaum, said Mexico is not currently planning to rollout reciprocal tariffs .³

Do any exemptions apply?

Tariffs are currently suspended on imports of selected consumer electronics and semiconductors into the US. Copper, pharmaceuticals and lumber are also exempt for now, although the US government has indicated that separate duties may be levied on these commodities in the coming weeks.

Are more tariffs coming?

While countries and industries prepare to negotiate deals during the 90 day pause announced on 9 April, the US government has suggested it could introduce further tariffs, including potential duties above the 10% base rate on global imports⁸. The UK is in talks with the US about a possible trade deal and tariff exemptions on certain commodities including steel and cars⁴. The UK government has signalled it will use investment and funding to support industries that could be affected.

How does tariff volatility impact businesses in the UK?

Each year, the UK exports over £193 billion worth of goods and services to the US ⁵, making the US the UK’s largest trading partner. In fact, British exports to the US account for nearly 18% of all UK trade⁶ and as a result, changes in US trade policy stand to have a significant impact on businesses across the country as well as the UK economy as a whole.

Currently, the tariffs that directly impact UK businesses are the 10% basic rate plus the 25% tariff on steel, aluminium and car imports. The UK is not a significant supplier of steel to the US and the country accounts for just 10% of British steel exports⁷. However, British steel suppliers that do export to the US will be forced to accommodate these additional fees by either inflating the cost of their products or taking a significant hit to their profit margins.They could also be affected by other countries 'dumping' large quantities of steel into the global market as US demand dwindles, leading to a decrease in the price of steel. For carmakers and manufacturers of car parts, it could see the cost of exporting to the US market skyrocket or companies moving their operations to the US to avoid tariffs.

Other products sold by UK businesses but made in affected countries will also be impacted by tariffs. That means that products made in China and then shipped or finished in the UK and then sold in the US will be subject to fees.

Indirectly, nearly all businesses in the UK will have to navigate the economic fallout of global tariffs, including inflationary pricing, currency fluctuations and changes in customer demand. All of which can have a significant impact on their supply chains and bottom line.

How do tariffs impact currency valuations?

Changes in demand for a country’s products may lead to currency fluctuations. If a country operates in a trade surplus — where it exports more goods than it imports — it can be expected that its currency is in high demand. This is because overseas customers will need to process transactions in the currency of their supplier’s operating country. In turn, this causes an appreciation in the currency’s value.

In theory, US tariffs on Chinese goods imports could decrease demand for Chinese products in the U.S., therefore strengthening demand for American goods. As a result, the US dollar (USD) could appreciate and the Chinese yuan (CNY) could depreciate.

For businesses in the UK, this would mean that goods imported from the US could be relatively more expensive while goods imported from China would be relatively less expensive — assuming the value of the British pound stays relatively stable.

However, a potential slowdown in global trade prompted by the tariffs along with and a slump in consumer confidence could lead to a decrease in demand for USD as consumers and businesses, who have previously used the dollar as the reserve currency for trade, place fewer orders. This slowdown, along with changing market sentiment among investors could lead to a decrease in the value of the dollar ¹⁰,meaning that goods imported to other countries from the US will be relatively less expensive.

Any changes to exchange rates will have an immediate effect — either positive or negative — on businesses importing goods from either country.

What can businesses do to protect their operations?

Tariffs require businesses to pay particular attention to global markets, currency valuations and how each impacts their supply chains. To prepare for further uncertainty, businesses in the UK should dig into their overseas supply chains and take an audit of where their products go before they are ultimately delivered to customers. Similarly, understanding which currencies your business operates in — and how their value may fluctuate as a result of tariffs — will give you better insight into potential changes.

If you’re a UK business with a supplier in the US, your next order could be relatively more expensive due to changes in the value of USD. To avoid being stung by currency fluctuations, businesses should ensure their international payments infrastructure is in order. That way, they can ensure they are getting a competitive exchange rate, avoiding paying additional fees and even reduce delays while keeping their profit margins stable.

Holding balances in multiple currencies can also help to mitigate vulnerabilities. If you have bank accounts or balances in both GBP and USD, you can hold, convert and spend your money when the exchange rate works best for you. If you’re receiving a payment from an American customer in USD, for example, and expect the value of USD to change, you can hold the money until the exchange rate is most favourable. This, in turn, can help your business partially offset some of the negative impact of tariffs.

Even without multiple balances, businesses need fast and reliable international payments to reduce risk and keep suppliers and customers happy. If you expect making a transaction at a certain exchange rate, week-long delays can result in unplanned and expensive additional costs if there is significant movement in the currency markets.

How Wise Business can help

Wise Business makes sending, receiving and spending money in 40+ currencies fast, easy and affordable so businesses can react quickly and scale globally. To help steady operations during tariff volatility, businesses can use the Wise Business account to create and manage 9+ domestic account details in currencies like USD, GBP, EUR and SGD. These domestic details provide businesses with more flexibility and control over how and when their money is exchanged and reduce the need for costly exchange rates or currency conversion.

The account also enables businesses to hold and convert money in multiple currencies at the mid-market rate, whenever the exchange rate works for them and with low fees. Businesses can also set up auto-conversions by picking their desired exchange rate and a specified amount to convert between two eligible currencies. Wise Business will watch the rate and convert their money automatically when the desired rate is met in the market.

With a commitment to saving businesses both time and money, 65% of payments processed via Wise arrive within 20 seconds and the account never charges hidden fees. Instead, businesses can rest assured that they’re getting a good deal on their foreign exchange and focus more time on navigating growth.

Learn more about Wise Business here.

Looking for more information on tariffs?

See these resources for up-to-date tariff information.

• Top U.S. News Today | AP News
• Politics : NPR

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Sources:
1 Chu, Mei Mei, and Ella Cao. “China targets US soybeans, lumber in stepped-up response to Trump tariffs.” Reuters, 5 March 2025.

2 List of products from the United States subject to 25 per cent tariffs effective March 4, 2025.” Canada.ca, 4 March 2025.

3 Verza, Maria, and Megan Janetsy. “Mexico says it will impose retaliatory tariffs on US with details coming Sunday.” AP News, 5 March 2025.

4 “UK signals it will seek exemptions from US steel tarrifs.” BBC, 13 February 2025.

5 “Trade and investment core statistics book.” GOV.UK.

6 ibid

7 Islam, Faisal, et al. “Steel and aluminium tariffs: UK will not immediately respond.” BBC, 11 February 2025.
8 Wade, Gavin et al.“White House Considers Slashing China Tariffs to De-Escalate Trade War.” Wall Street Journal, 23 April, 2025

9 Levy Cindy and Shubham Singhal,"Tariffs and global trade: The economic impact on business"“Tariffs and global trade: The economic impact on business

10 "Why should I care if the US dollar falls?" “Why should I care if the US dollar falls?, BBC, 23 April, 2025