New transatlantic tariffs — including steep levies on steel and aluminium and higher duties on many exports — are squeezing margins and prompting firms to favour staged digital investments, improved visibility and pragmatic supply‑chain fixes over sweeping automation bets.
The new transatlantic trade deals have forced European and UK manufacturers to confront a harsher commercial reality: higher duties, more volatile cross‑border flows and the prospect of materially higher input costs. According to Industrial News, the agreements enshrine tariffs not seen in decades — around 15% on many EU exports to the United States, roughly 10% for the UK with sectoral carve‑outs, and a sharp 50% levy remaining on a range of steel and aluminium lines — a move that industry executives say has raised the cost of delay for firms that have long postponed digital and automation investments.
The timing could not be worse for UK factories. S&P Global Market Intelligence’s analysis of May 2025 purchasing managers’ index data shows the UK manufacturing sector remained in contraction, recording some of the steepest falls in output, export orders and employment among the economies surveyed. That same dataset highlights rising input costs and supply delays as key drivers of shrinking margins and investment capacity. In short: manufacturers are squeezed on demand, labour and now trade costs.
How firms are responding is already beginning to diverge. Many companies are pursuing incremental, pragmatic steps to protect margins rather than risking large, transformational bets. According to Epicor’s industry blog, firms are turning to ERP and related digital tools to model landed costs, re‑price products and test alternative sourcing options — essentially using improved visibility to make smaller, targeted interventions that preserve cash and reduce risk. Deloitte’s 2025 smart manufacturing survey reinforces this picture: while adoption of sensors, cloud analytics and robotics is growing, most manufacturers favour measured pilots, targeted upskilling and staged roll‑outs over wholesale factory rewiring.
Voices from industry and vendors underline the mixed pace of change. Speaking to Industrial News, Andy Coussins, executive vice‑president of international at Epicor, said many manufacturers are “actively exploring how automation, digitalisation and advanced manufacturing can help them navigate new tariff regimes and rising costs,” but added that “pace and scale of investment vary widely.” Gemma Thompson, a senior consultant at Proxima, told the same outlet that “uncertainty is a major barrier,” noting that shifting tariff regimes and long project lead times make firms hesitant to commit to large capital programmes — even as some sectors, notably automotive and other high‑value manufacturing, reassess operations and supply strategies.
Supply chain fragility is central to the debate. The May 2025 US decision to double steel and aluminium duties to 50% illustrated how quickly policy can increase costs and complicate integrated supply chains, according to contemporaneous reporting. Industry executives say the most immediate mitigations are pragmatic: dual‑ or multi‑sourcing for critical inputs, closer inventory control and better traceability. But those tactics create operational complexity — more suppliers to manage, more stock to coordinate and a heavier information burden.
That is precisely where digital tools come into play. TSC Auto ID, for example, has been promoting tighter integration of barcodes, 2D codes and RFID for traceability and labelling; RFID Journal reported this year on the company’s new RFID‑enabled industrial printers and the role such devices play in speeding automatic identification and data capture across warehouses. Bob Vine, TSC’s country manager for the UK, Ireland and Nordics, told Industrial News that “the humble barcode has come a long way,” describing automatic identification as foundational to resilient supply chains.
Technology providers argue that speed of data is as important as the systems themselves. Solace’s technical team has advocated event‑driven architectures that push real‑time events across distributed systems so businesses can react to supply‑chain shocks without manual lag. As Tom Fairbairn, distinguished engineer at Solace, put it to Industrial News: “Can your supply chain IT support an adaptive supply chain?” His point is echoed by use‑case reporting showing event‑driven messaging can enable near‑instant rerouting, re‑sourcing and inventory rebalancing when policy or logistics conditions change.
But even where the technology exists, barriers persist. Deloitte’s survey and industry consultants single out integration complexity, funding constraints and skills gaps as recurring obstacles. Many manufacturers are therefore prioritising lower‑risk measures: dashboards to model tariff impacts on raw‑material prices, procurement automation that tests multiple supplier scenarios, and digital twins or scenario planners to stress‑test margin outcomes before committing capital. Epicor’s advice to customers, as set out in its blog, mirrors the pragmatic language heard in industry: focus on tightening processes, upskilling staff and deploying analytics that maximise the value of existing assets.
Policy levers could accelerate adoption. Manufacturers and consultants interviewed for the Industrial News piece identified clearer rules on origin documentation and targeted investment incentives — grants, tax reliefs or matched‑funding for automation projects — as priorities that would reduce the cost of starting pilots and scaling successful programmes. The European Commission warned at the time of the steel and aluminium tariff increase that mutual disruption would add costs for businesses and consumers on both sides of the Atlantic; if governments want to shield industry from the worst effects of the new tariff era, the tools of industrial policy can make a difference.
The net effect is likely to be uneven. Deloitte’s findings suggest a structural trend towards more digital and robotic capability, but adoption will be phased and sector‑specific: firms already on a digital pathway, or those in tariff‑sensitive supply chains, will move faster. Others will wait for demand and policy clarity. As Proxima’s Thompson told Industrial News, for some companies automation will form part of wider strategies that also include reshoring or supply diversification — but for many, the first steps will remain small, reversible and information‑led.
In short, the new tariff regime has raised the stakes. It has not produced a single wave of immediate, large‑scale automation investment, but it has sharpened the calculus for firms that have spent years postponing digital projects. Where it does prompt action, that action will likely be pragmatic: improved visibility, faster data flows, selective automation and a heavier reliance on tools that let managers model and pivot quickly when tariffs, transport or input markets change. For UK and European manufacturers operating in a structurally riskier trading environment, the cost of delay now looks higher — but so too does the premium on careful, staged digital transformation rather than headline‑grabbing factory conversions.
Source: Noah Wire Services
Subscribe to Industry Updates
