The UK is the world's fifth largest economy and tenth largest exporting economy and has a lot to offer.
The country's latest trade figures show that UK merchandise exports rose by around $5.57 billion in the third quarter of 2019 to $116 billion, up 5% from the previous quarter. GDP growth also rebounded slightly to 0.3% in the third quarter from a contraction of 0.2% in the second quarter.
With such potential, the UK remains an attractive trading market. Here's what you need to know if you want to import from the UK.
Imported from the UK: Top products imported by global buyers
Machinery, transport and chemicals are the top three UK imports. They account for 21%, 18% and 15% of UK imports respectively, and more than half of all imports.
Tips to help you import from the UK to the US
The US is the largest importer of UK products, with imports totalling $45.2 billion in 2017. As with overall exports, the top three product categories that most U.S. buyers import from the U.K. are transportation (26%), machinery (19%), and chemicals (18%).
Given the high demand for UK products in the US, it is important to understand how to handle and process products imported from the UK into the US.
Whether you're an experienced shipper or not, here are four things to keep in mind when importing from the UK to the US.
1. Correctly obtain the tariff code
The UK uses six-digit tariff codes, also known as commodity codes or HS (Harmonized System) codes, to classify its goods. Note that this is different from the US, which uses a more specific variant of the HS code, commonly known as the HTS (Harmonized Tariff Schedule) code.
HS codes or HTS codes, these codes classify goods into different categories upon which import duties and taxes are calculated.
The cargo code used on the import document must match the importing country's cargo code. Therefore, if you are importing from the UK to the US, you must list the corresponding HTS code of seven to ten digits. To find HTS codes, visit the US International Trade Commission's website.
2. Book your shipment at least two weeks in advance to avoid trucking issues in both countries
Both the UK and the US are currently facing trucking shortages. While the U.S. continues to adapt to ELD mandates, the situation appears to be improving. Cargo pressure has eased since the slump in the first half of 2018.
On the other hand, the situation is expected to worsen after Brexit. Its trucking industry relies heavily on drivers from Eastern Europe, and leaving the European Union means cutting off access for those drivers. Experts say this will lead to increased costs, delays and reduced flexibility.
To prepare, shippers should consider booking shipments at least two or even three weeks in advance to avoid potential delays and problems.
3. Obtain proper legal advice before contracting with your UK exporter
To avoid complications, it is important to understand the rules and regulations of your importing country. This is no different from importing from the UK. While language and communication are not an issue, there may still be bureaucratic barriers and country-specific administrative issues that could hinder imports from the UK.
Before entering into a contract with your UK seller, make sure to have your agreement reviewed by a lawyer familiar with UK and US law.
Below is a list of UK lawyers based in the US published by the UK government. The US embassy in the UK also has its list of US lawyers in the UK.
4. Import VAT free
Value Added Tax (VAT) is a sales tax that applies to goods and services sold within the European Union. VAT should not be levied on exports to countries outside the EU.
That said, make sure your seller doesn't charge you VAT when importing from the UK. Check your commercial invoice, which should reflect the price and shipping costs of your imported goods. Based on these numbers, U.S. Customs will determine the import duties and taxes due.
