The US tariff saga continues to rumble on, and global markets have been tumbling. Retaliations - repeated in some cases - between certain countries and the US give more force to a growing global trade dispute.
Even though the UK’s main rate is a relatively low 10% (25% on British cars) – and you might not trade with the US at all – there is growing concern about what this means for global supply chains, pricing and business confidence.
What could this all mean for your business? Read on as we look at 7 areas of concern and what you can do to protect your business.
Confidence is Falling – And That Could Hit Your Sales
Financial markets have dropped and business confidence has taken a knock. When uncertainty rises, both consumers and businesses tend to hold off on spending – especially on goods and services they see as non-essential.
Even if you don’t sell internationally, your customers might pull back. That could mean fewer orders, delayed projects, or reduced repeat business – especially if your product or service is considered a “nice-to-have.”
What you can do:
- Focus on customer retention. You could consider offering flexible options, smaller packages or promotions that keep work flowing. Staying visible and keeping communication open are also key.
- Think creatively about how you present the value of your business to customers, so that they see your products or services as something they can’t do without, even in lean times.
- Review your sales mix: do you rely heavily on one or two customers or sectors that might be vulnerable?
Costs May Rise
Tariffs add costs all along the supply chain. Even if you buy from UK suppliers, they may be importing parts, packaging or materials that are now more expensive.
Your costs could rise quietly. Even if the increases are small, they can add up over time and erode your margins.
What you can do:
- Look at setting up a cost tracker for the things you buy and monitor it on a monthly basis. Just a spreadsheet can do the job – if you need help we can help you to set this up.
- Then, review your profit margins and consider whether you need to adjust your own pricing.
Understand How Your Customers Are Being Affected
Even if you are not directly affected, your customers might be. You might begin to notice changes in order sizes, slower repeat business, or requests for longer payment terms. However, without understanding why this is happening, it’s hard to respond effectively.
What you can do:
- Talk to your top clients. Ask them how their business is doing, what challenges they’re facing and whether they’re seeing cost increases or changes in demand.
- You can then use that insight to anticipate trends, adjust what you are offering to customers or support them more proactively.
You May Need to Rethink Supplier Relationships
Your suppliers may be facing pressure from tariffs, transport delays or their own cost increases. So, you may see price hikes, but also product shortages or slower delivery times as your suppliers struggle to maintain reliability.
What you can do:
- Check your top 3-5 suppliers. Where do they source from? Is that likely to create an issue for them and you?
- You could also build a back-up plan in case one supplier becomes unavailable or unaffordable.
You Might Be Affected by What Happens to Other Countries
The US has sharply increased tariffs on China and other major economies and some are retaliating. While changes to US tariffs don’t directly impact on the UK’s own trade relationships with other countries, the potential upshot is that global supply chains could be redrawn.
That may mean some new opportunities for UK businesses, but it could also mean that products become harder or more expensive to get.
What you can do:
- Firstly, look at your stock and equipment. Are there any items you’d struggle to replace quickly?
- If you’re planning to invest in equipment, could there be any value in doing it now before prices rise further?
The UK May Respond Too – Which Could Shift Things Again
The UK government is currently consulting on whether to introduce retaliatory tariffs, with the consultation not due to end until 1 May 2025. It is under pressure to act and if it does, that could shift the landscape again, which could affect prices, sourcing options and trade relationships.
This could mean more changes to the cost or availability of goods, particularly if you rely on imports. But it could also create new opportunities – especially if UK-made goods become more competitive or if others pull out of markets you could move into.
What you can do:
- Be cautious about entering long-term supplier contracts if there’s a risk of tariff-related changes in the coming months.
- Look out for new local suppliers who may become more competitive if tariffs rise.
- Explore whether any competitors are stepping back from markets or products you could step into.
- If you manufacture or source items in the UK, consider whether the changing conditions could allow you to promote “locally made” or tariff-free products more effectively.
Stay Focused on What You Can Control
There’s a lot of noise and uncertainty and with so much change happening globally, it’s easy to feel like your business is at the mercy of outside forces. While you can’t control tariff decisions or market reactions, you can stay proactive in how you respond.
Businesses that stay alert and adaptable tend to handle economic shocks better and will often come out stronger on the other side.
What you can do:
- Review your cashflow and key costs regularly. Even a simple monthly check-in can help you spot trends early.
- Keep communication open with customers and suppliers so you’re not surprised by any changes.
- Take time to assess where your business is most exposed, whether that’s in pricing, sourcing of materials or services, or customer demand.
Stay Informed and Financially Prepared
While the tariffs may feel far away, their effects could come closer to home quickly. So, it’s an important time to pay attention to what is happening and any early indications that your business could be affected. We are here to help you stay ahead of the curve and make informed decisions.
Do you need help spotting the risks (or opportunities) for your business? Get in touch and let’s talk it through.
