The UK government’s proposal to introduce import duties on low-value goods has raised alarms among business groups, particularly in the East Midlands, where many small and medium-sized enterprises (SMEs) rely on frequent, smaller shipments to maintain their operations. The East Midlands Chamber has voiced concerns that the policy could place additional financial strain on these businesses, potentially forcing them to raise prices or alter their supply chains.

Impact on Trade and Business Operations

The UK government has been reviewing the current tariff exemption that allows low-value imports to enter the country without duties. A consultation on the proposal closed on 6 March, with any changes expected to be implemented no earlier than 2029. However, the potential impact on businesses is already being felt, with many operators preparing for the possibility of increased costs.

Research from the British Chambers of Commerce highlights that more than half of surveyed importers would pass on the new costs to customers if duties between 5% and 10% are applied to smaller shipments. This could lead to price hikes for consumers, which in turn may reduce demand for products imported by SMEs.

Operational changes are also anticipated. Around 21% of importers said they would consider switching suppliers, while 20% would consolidate shipments to minimize the impact of the new duties. A further 12% indicated they might reduce their importing activity altogether. These adjustments could disrupt supply chains and increase logistical complexity for smaller firms.

Small Businesses at Greater Risk

Business groups argue that SMEs are particularly vulnerable to the effects of the proposed duties. Many rely on frequent, smaller shipments, especially those in the online retail sector or niche product markets. The shift from a tariff-free environment to one with added costs could significantly impact their ability to remain competitive.

Lucy Granger, Head of International Trade at the East Midlands Chamber, emphasized the potential consequences for small businesses. ‘Any new costs to be covered by exporters mean additional burden for them and would add to pressure on them to consider price increases. For small and medium sized businesses, removing the exemption on low value items would bring disproportionate pain, especially if costs are applied to individual items and then there’s the risk of those charges creeping up and inflating over time,’ she said.

Granger warned that without an exemption in place, SMEs using e-commerce to ship individual items could suddenly find their operations become unviable. ‘Those firms could suddenly find simple, individual shipments become so expensive that they think twice about the extent to which they want to bring goods in, and that’s not a comfortable situation to be in,’ she added.

Broader Policy Context and Future Implications

The UK is not alone in considering changes to its import policies. The United States ended its ‘de minimis’ import exemption in 2025, while the European Union has signaled it may introduce similar measures. These developments are part of a global trend to adjust trade regulations to reflect evolving economic conditions and market demands.

According to the British Chambers of Commerce, the proposed changes could have far-reaching implications for the UK’s trade relationships and the competitiveness of its domestic businesses. The potential introduction of duties on low-value imports may affect not only SMEs but also larger corporations that rely on just-in-time delivery systems and global supply chains.

The East Midlands Chamber has called on the government to reconsider the proposals, urging policymakers to ensure that small and medium-sized businesses are not placed at a disadvantage. ‘I’d urge Government to re-think proposals so that small and medium sized businesses that import goods are not presented with a barrier to growth,’ Granger said.

The consultation on the proposed duties closed on 6 March, and the government is expected to announce its final decision in the coming months. Any changes to the current tariff exemptions would not take effect until 2029, providing businesses with some time to adapt. However, the uncertainty surrounding the policy is already causing concern among many importers and exporters.

Analysts suggest that the government’s decision could influence future trade negotiations and agreements. The potential for increased import costs could also affect consumer behavior and inflation rates in the UK. As the government weighs its options, the voices of business groups like the East Midlands Chamber will be crucial in shaping the final policy.

With the global economy becoming increasingly interconnected, the UK’s approach to trade regulations will have significant implications for both domestic and international markets. The proposed changes to low-value import duties are just one part of a broader conversation about the future of trade policy in the post-Brexit era.