The latest round of US trade tariffs has left UK manufacturers and logistics providers grappling with immediate commercial consequences. According to CPiO’s July 2025 survey of 250 SME finance decision-makers, 70% report increased supply-chain risks, 68% see a “high” impact on short- and medium-term investment plans, and more than half (56%) have seen up to a 40% reduction in their sales pipeline.
The findings, published in CPiO’s report International Tariff Turmoil: How global trade policy is rewriting UK SME finance strategy, underline how trade policy is reshaping day-to-day operations rather than remaining a distant geopolitical backdrop. As global supply chains reroute and US companies pivot towards domestic production, UK SMEs are caught between uncertainty abroad and indecision at home.
Andrew Watkinson, managing director at CPiO, said: “The changing trade tariffs are more than a policy issue – they’re directly stalling sales pipelines, straining supply chains and paralysing decision-making for UK SMEs.”
The paralysis is evident inside finance functions. Nearly half of SMEs (46%) admit they cannot model future scenarios effectively, with leadership indecision compounding the problem. ERP systems are also under scrutiny: 48% of respondents say recent disruption has exposed weaknesses in their platforms, yet only 18% are prioritising upgrades. The contradiction is stark — companies recognise systemic failures but are reluctant to invest in tools that could reduce long-term exposure.
Instead, many SMEs are defaulting to defensive measures. Supplier diversification and reshoring (43%), strengthening finance skills (43%), and stockpiling through expanded domestic warehousing (38%) top the list of planned responses. These are pragmatic levers, but most remain at the planning stage. CPiO’s data shows a clear imbalance: 66% are preparing contingency plans, while far fewer have implemented structural changes.
The consequence is a business environment stuck in caution. Inflexible systems and limited forecasting capabilities prevent SMEs from moving beyond “wait-and-see” strategies, leaving supply chains vulnerable to further disruption. As major technology players, from Texas Instruments to Apple, accelerate US-based manufacturing in response to tariffs, the knock-on effects for Asian suppliers — and their downstream UK partners — remain unresolved.
For policymakers, the implications are equally uncomfortable. CPiO’s research shows that 48% of UK SMEs want the government to pursue new free-trade agreements, 45% favour diplomacy over retaliation, and 44% demand clearer guidance aligned with shifting tariff schedules. Yet little clarity has emerged, leaving manufacturers and logistics providers to improvise.
Resilience by design, rather than by reaction, is now the strategic imperative. Diversifying supply chains, embedding robust ERP and forecasting tools, and strengthening financial expertise are not optional extras but critical components of competitiveness under ongoing tariff regimes. Without decisive action, UK SMEs risk remaining in perpetual planning mode while larger competitors seize advantage.
For a deeper breakdown of what CPiO’s survey means for UK supply chains — and how tariffs are exposing a widening resilience gap between SMEs and larger enterprises — visit our dedicated analysis on IN Supply.
