Getting Ready For a Trade War – Jason Soars

So Trump has kept hit election promise and started to impose Tariffs.

Right now, the UK isn’t directly affected by new trade tariffs, but that could change.

The best approach? Be prepared. Businesses that plan ahead will be in a much stronger position if tariffs do come into play.

My role as a fractional Finance Director is to help my clients—whether they import, export, or operate solely in the UK—get ready to act if needed.

Rather than reacting when it’s too late, my focus is on scenario planning and taking steps now to reduce risk.

1. Preparing Importers: Managing Cost Increases and Supply Chains

Potential Risks:

· Direct Cost Increases: Tariffs could make imported goods more expensive.

· Supplier Disruptions: If key suppliers become unviable, alternatives will be needed.

· Cash Flow Pressures: Higher costs could strain working capital.

Actions to Take Now:

· Review Suppliers: Start exploring alternative suppliers, both in the UK and tariff-free regions.

· Model Different Scenarios: Understand how tariffs would affect your margins and pricing.

· Plan Stock Levels: If feasible, increase inventory now to avoid potential cost spikes.

2. Preparing Exporters: Protecting Sales and Market Share

Potential Risks:

· Reduced Demand: Higher prices for overseas buyers could lead to lost sales.

· Competitive Disadvantage: Tariff-free competitors may gain an edge.

· Increased Red Tape: Customs delays and compliance costs could rise.

Actions to Take Now:

· Assess Market Exposure: Identify how much of your revenue relies on tariff-affected exports.

· Diversify Markets: Start exploring alternative markets where tariffs won’t be an issue.

· Strengthen Customer Relationships: Open discussions with overseas buyers to manage potential changes.

3. Preparing UK-Only Businesses: Managing Inflation and Supplier Costs

Potential Risks:

· Supplier Cost Increases: If UK suppliers face tariffs, their prices will rise.

· Inflationary Pressure: Tariffs can add to broader inflation, affecting wages and costs.

· Competitive Shifts: UK-based suppliers might become more attractive if tariffs limit cheap imports.

Actions to Take Now:

· Review Supplier Contracts: Negotiate fixed pricing where possible to control costs.

· Explore UK-Based Alternatives: If tariffs hit imports, domestic suppliers may be a better bet.

· Tighten Cost Controls: Inflationary pressures could rise—ensure your pricing strategy accounts for this.

Final Thoughts: The Best Defence is Preparation

The key takeaway? You don’t need to act yet, but you do need to be ready to act. Businesses that prepare will have options—those that don’t may be left scrambling.

Here’s where I’m focusing with my clients:

· Scenario Planning: Modelling different tariff outcomes and financial impacts.

· Reducing Risk Today: Reviewing supply chains, pricing strategies, and cash flow plans.

· Building Resilience: Ensuring businesses can pivot quickly if tariffs come in.

If you want to discuss how prepared your business is, I offer a free 30-minute consultation to assess your exposure and develop an action plan. The time to prepare is now.