More than three-quarters of UK businesses express considerable concern regarding tariffs and the uncertainty surrounding global trade, as revealed by the latest Barclays business prosperity report. The survey, which captured insights from 1,000 firms of varying sizes, illustrates a widespread apprehension ignited by escalating trade tensions, particularly those stemming from the US administration’s recent tariff increases.
Specifically, 79% of respondents conveyed worries about the ramifications of a global trade war, notably one initiated by US President Donald Trump, whose administration has implemented substantial tariff hikes. Nearly half of the businesses surveyed—48%—have begun proactive adjustments to their operations and supply chains in anticipation of these potential shocks to their economic landscape. Such preemptive measures include scaling back investments in the US market, with 14% of firms already making cuts or pausing spending directed towards American ventures.
Interestingly, while a substantial portion of the businesses grappling with these challenges, optimism still permeates the survey findings. Approximately 86% of firms reported confidence in their overall prosperity over the next three to five years. Despite this prevailing sense of optimism, 37% are bracing for adverse impacts from US tariffs on their business trajectories.
The report also noted a divergent trend in international trade, where nearly half of the firms indicated an increase in exports over the past year. Of these, 59% reported enjoying growth in trade with Europe and Central Asia, overshadowing the 18% that experienced growth with the US and 44% with the Asia-Pacific region. This shift towards diversification reflects a broader industry trend as businesses seek to navigate the unpredictable trade environment.
In alignment with the Barclays report, a separate survey conducted by Santander also echoed these sentiments, revealing that 63% of UK businesses regard rising tariffs as a significant growth risk. Among larger companies aiming to expand abroad, this concern escalated to 80%, further underscoring the pressure firms are under as they adapt their supply chains to mitigate exposure to tariffs.
Further illustrating this adaptive response, a poll by HSBC indicated that 39% of businesses are pre-emptively raising prices in anticipation of tariff-induced cost increases. Additionally, 50% of firms indicated a shift in their export markets towards countries with more favourable trade conditions, while others are seeking to reshape their supply chains to reduce risks associated with ongoing trade disputes.
This move towards resilience is echoed by the British Chambers of Commerce, which highlights the positive start of UK goods and services exports in January 2025, despite warnings about a potentially difficult trading environment ahead, punctuated by the concern of US tariffs and retaliatory measures from trading partners.
The landscape of global trade continues to evolve with significant implications for economic growth. Barclays has revised its global growth forecast, projecting a slowdown to 2.9% in 2025, primarily driven by tariff uncertainty and trade tensions. The urgency for policymakers to address these issues is paramount, as prolonged disputes could usher in a recession across developed economies.
Matt Hammerstein, chief executive of Barclays UK corporate banking, emphasised the critical nature of robust international trade strategies in this climate. He remarked, “Given the widespread uncertainty in the international trade environment, it’s unsurprising that businesses are taking proactive steps to adapt to these global pressures.” The emphasis on productivity gains, skilled labour development, and digital transformation is seen as essential for firms to weather the rising cost pressures and ongoing trade challenges.
The resilient adaptation strategies adopted by UK businesses reveal a dynamic landscape of international trade, as firms strive to convert geopolitical uncertainty into competitive advantages even as they brace for continued instability in the global market.
Reference Map
- Barclays business prosperity report
- Santander Trade Barometer
- HSBC survey findings
- British Chambers of Commerce reports
- Barclays global growth forecast and economic insights
Source: Noah Wire Services
