Trade Policy in Flux: What Tariffs Mean for Supply Chain Strategy

This article is provided by BRC Associate Member, Customs Support.

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For every new and unpredictable action, there is usually a predictable reaction – something which is proving to be the post ‘Liberation Day’ reality for businesses. As the dust begins to settle on US tariffs imposed on more than 60 countries, it’s clear the White House announcement on April 2 has so far lived up to industry expectations.

According to a HSBC survey of 92 logistics firms, three quarters of respondents (75 per cent) predicted they would be impacted by changes to tariffs and policies while over a quarter (28 per cent) have already delayed investment decisions.

One in ten (10 per cent) have brought forward investment decisions to act quickly in the face of tariffs, as well as introducing measures to protect themselves from the potential impacts of the changes.

The survey also revealed that:

• 21 per cent are reconfiguring their supply chains
• 12 per cent are scaling back services and products
• 12 per cent are now sharing services with other businesses to spread risk
• 10 per cent are resorting to stockpiling products
• 10 per cent are considering their future within the industry as the tariffs make their business less viable

While headlines often paint a black and white picture, the reality of global trade is far more nuanced. At Customs Support Group (CSG), we’ve been speaking with our clients to better understand their concerns. Unsurprisingly, risk, hidden costs and uncertainty continue to dominate the conversation and present persistent challenges for businesses operating across borders.

Increasingly, businesses are looking for even more specialised and nuanced expertise to help navigate a world of evolving customs regulations and stricter environmental controls. Tariffs are one burden, but other government costs on business – including the April rise in National Insurance Contributions (NICs) – are providing further employment capacity challenges. This has meant more firms are looking to outsource their more complex customs conundrums.

According to our own customer survey, almost 60 per cent of businesses now choose to outsource customs tasks because of lack of capacity, while 45 per cent saw the need to accessing greater expertise than exists in-house.

This feeds into the overall recurring theme of the ever-changing face of compliance. The already-intricate customs clearance process is becoming increasingly demanding. For many, it’s a thorn in the side and with the latest wave of tariff changes, that thorn is no longer a scratch but may be starting to dig in.

For others, it’s a chance to look at tariff engineering or re-auditing their classification to ensure compliance in this new landscape, as since the UK introduced its own Global Tariff in 2021, the stakes have only risen. With attention on tariffs across the world, companies are realising that misclassification isn’t just a paperwork issue, it’s a compliance failure – one which can lead to delays, fines or even criminal charges.

In the macro environment, reciprocal tariffs were always a likely response and many countries are reassessing their long-term trade strategies. There’s a growing recognition that global trade relationships must evolve, particularly around sensitive issues such as trade imbalances and economic interdependence. Businesses are already horizon-gazing for help in navigating these choppier waters ahead, rather than the simple reaction of battening down the hatches.

Because change is inevitable, ‘tariff terror’ is not an option for businesses. Instead, making the necessary change to address that inevitable is the only true path forward. Contact CSG today for support.