US tariff update – what should UK businesses do now?

There have been reports in the press that the US Administration is considering increasing the tariff rate to 15 percent, the maximum allowed under legislation, however at the time of writing the rate remains at 10 percent.

The President also issued a separate Executive Order reaffirming and continuing the suspension of duty-free de minimis treatment for low-value shipments, including goods shipped through the international postal system, which will also be subject to the temporary import duty imposed under section 122.

Note that industry based tariffs imposed under separate legislative authority (including e.g. tariffs on aluminium, steel, automobiles and car parts) are unaffected by the SCOTUS decision and remain in force.

The SCOTUS decision did not address whether refunds will be issued or establish a refund process for IEEPA tariffs paid to date. However, Justice Kavanaugh referred to the possibility in his dissenting opinion, “[t]he United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others”. 

The sums involved for refunds could be significant, with press reports suggesting refunds for duties already paid could potentially total up to $175 billion. 

Additional guidance is expected in due course regarding both refund procedures and the operational mechanics for filing entries. The potential routes to achieving refunds could include:

• Post Summary Corrections (PSCs) - PSCs allow importers to electronically correct entry summary data presented to and accepted by US Customs and Border Protection (CBP) through the Automated Commercial Environment (ACE) centralised digital system for processing imports and exports prior to liquidation. Submitting PSCs to correct improperly applied IEEPA tariffs may accelerate the refund process. However, it remains uncertain whether CBP will accept IEEPA-related PSCs, and they may be costly to prepare and require substantial ongoing data management;

• Protest - When an importer disagrees with a decision made by CBP, the only option available for relief once liquidation has occurred is to file a Protest. This provides the legal vehicle for importers and interested parties to administratively contest CBP decisions related to imported merchandise. Protests must be filed within 180 days of liquidation. Protests may be filed electronically in ACE or by paper submission at the port where entry was made. The advantage of protests are they are relatively easy to file and may preserve residual jurisdiction for legal action. However, liquidation dates must be monitored to ensure filing by the 180 day deadline and the process can normally take one to two years; and

• Litigation - Litigation through the courts may provide definitive resolution and legal clarity. Importers who filed a suit prior to the 20 February 2026 SCOTUS decision are likely to have standing with the Court of International Trade. However, the timeline for refunds under this option is unclear.

Section 122 only provides the President with temporary unilateral authority to impose tariffs for up to 150 days. The 150-day period can only be extended through Congressional action. Having taken effect on 24 February 2026, without additional Congressional action, the 10 percent global tariff will end on 24 July 2026. 

Given section 122’s 150-day limitation, the President has announced that his Administration will pursue additional tariffs under other authorities including investigations under section 301 of the Trade Act 1974 (‘Unfair Trade Practices’ tariffs) as longer term trade measures. Businesses should carefully monitor developments in the coming months.

The new tariff may also impact on Free Trade Agreements (FTA) that the US has been brokering with overseas partners. For example, the EU and India have indicated that their FTAs with the US are on hold until further notice as they examine the implications of the latest tariff developments. At the time of writing it is understood that the UK/US FTA, which included an agreed tariff rate of 10 percent, will continue to operate.

Tariffs are not going away any time soon and require careful management, particularly as the landscape is continually changing. Our key messages to UK businesses following the SCOTUS decision are:

• Obtain your US import data from the ACE portal - You can obtain this yourself from the CBP system; 

• Assess the potential amount of refund due - Using your ACE data, quantify the potential refund on IEEPA tariffs and determine next steps, including any protective positions. This will be particularly relevant to businesses in the retail, consumer and electrical goods, furniture, plastic and chemicals industries. In addition to conducting an IEEPA impact review, take this opportunity to identify other tariff miscalculations or misapplications that have been made by your customs brokers that could result in a refund. For example, sectors subject to sector specific tariffs (automotive, parts, metals, metal derivatives, wiring and heavy duty equipment) may find brokers have applied multiple extra tariffs in error; and

• Continue to assess mitigation strategies - Finally, continue to assess tariff mitigation strategies through tariff modelling, reviewing supplier and customer contracts, supply chain and transaction flow health checks, intellectual property strategy reviews, supply chain planning, transfer pricing support and much more.

Feel free to contact the authors or your local KPMG team if you would like to discuss tariffs further.

• Jenna Glass
• Jeeven Pawar