Small and medium sized enterprises (SMEs) trading overseas have taken a hit from the current global tariff situation, with some facing average costs of nearly £17,000 per business, research from Bibby Financial Services found.
More than half (55%) of SMEs now see tariffs as a key economic challenge, up 15% on last year, and almost half expect their overseas trade to fall by the end of 2025.
Jonathan Andrew, global CEO at Bibby Financial Services, said: “Our data clearly shows uncertainty regarding tariffs is having a direct impact on the plans of small and medium sized businesses across the UK.
“However, while some importers and exporters are seeing profit margins eroded amid currency volatility, others are using the situation as an opportunity to review supply chains and customer networks.”
The impact is sharpest for businesses exporting to the US, where the proportion expecting to trade less rises to 51%.
Nearly a fifth have already reduced the number of US customers they work with, and nearly six in 10 are now making currency payments in euros or sterling to avoid dollar volatility.
Some SMEs are looking beyond the US.
Just under two thirds plan to seek new trading partners in the next year, up more than 10% from last year, while over a third are expanding their partnerships to spread risk.
China has become the top new export target, with 13% of firms now looking to trade there, nearly double the number from last year.
Andrew added: “The global trading map is being redrawn, and SMEs across the country are contemplating how they can protect margins and remain competitive amid a constantly moving trading environment.
“More than ever, it’s vital SMEs can get ahead of the curve by assessing how tariff agreements could impact their operations, as well as taking a proactive role in managing currency risk.
“It’s these businesses and those who use the current uncertainty as an opportunity to seek new trading partnerships that will be well placed for growth in 2025 and beyond.”
