The new transatlantic trade deals have left European and UK manufacturers grappling with higher costs, uneven tariff regimes and supply chain volatility. While the agreements avoided a full-scale trade war, they locked in tariffs at levels not seen in decades — 15% on most EU exports to the United States, 10% for the UK with sectoral carve-outs, and 50% still in place on European steel and aluminium.
For many manufacturers, these structural headwinds come on top of weak demand at home and rising labour costs. The UK’s Manufacturing PMI remains in contraction, with job losses accelerating as firms struggle to protect margins. The question now facing industry is whether this new “tariff era” will finally accelerate long-predicted investment in automation and digitalisation — or whether uncertainty will keep companies cautious.
Andy Coussins, Executive VP of International at Epicor, says the signs are there, but they vary. “We are seeing many manufacturers actively exploring how automation, digitalisation, and advanced manufacturing can help them navigate new tariff regimes and rising costs. The interest is there, but the pace and scale of investment vary widely. For some, cost pressures, uncertain ROI, and the internal resources required for transformation are slowing decisions.”
Rather than big leaps, Coussins notes that many companies are focusing on incremental steps. “Many companies are investing on a smaller scale to help stay competitive. Those companies are spending what budget they do have on improving existing tools, upskilling employees and tightening processes.”
That can include dashboards that track how tariffs influence raw material costs, planning tools that test different scenarios for margins and pricing, and inventory systems that smooth out stock levels in volatile markets. “Staying focused on agility means businesses are more prepared to pivot when disruption hits, rather than scrambling to react after the fact,” he adds.
Supply chains under strain
The strain on supply chains is a recurring theme. Bob Vines, Country Manager for the UK, Ireland and the Nordics at TSC Auto ID, warns that “free trade and protectionist trade policies are fluctuating wildly, causing unprecedented disruption to interconnected and interdependent supply chains. To really optimise supply chains you need a dual sourcing or multi-sourcing strategy for critical raw materials that will both minimise tariffs levied as well as lead times and product costs. But such strategies are not without issue as they make it far more complex to manage additional suppliers and inventory, and require greater communication and coordination.”
Managing that complexity depends on solid information flows. “The humble barcode has come a long way over the years and is now a foundational tool for building resilient supply chains,” Vines says, pointing to the role of 2D barcodes and RFID in traceability and automation. He highlights that “over 1 in 10 (11%*) UK manufacturers were said to be significantly increasing their digital transformation in 2025 while 29% planned to leverage digital technologies, cloud and AI as strategies for growth.” For many, automation is already becoming embedded in supply chain operations, from automated storage and retrieval to labelling and inspection systems.
Consultancies are seeing the same patterns. Gemma Thompson, Senior Consultant at Proxima, says: “We’re seeing manufacturers, particularly in automotive and high-value manufacturing, reassess their operations in light of tariffs and supply chain pressures. While not every organisation is rushing to invest in large-scale automation, there’s a growing appetite for digital supply chain tools, process automation in procurement and technology that can improve efficiency and resilience. For some, automation is part of a broader strategy alongside reshoring or diversifying supply chains.”
But hesitation remains. “Uncertainty is a major barrier — shifting tariff regimes make it difficult to commit to long-term capital investments. Long lead times for major manufacturing changes also create hesitation,” Thompson notes. Yet the squeeze on margins is forcing companies to consider new tools, from digital supply chain platforms and AI-driven procurement to robotics and digital twins. “Staying ahead in the current market climate requires agility; and digitalisation has a significant role to play in enabling.”
For technology providers, the speed of data matters as much as the systems themselves. Tom Fairbairn, Distinguished Engineer at Solace, argues that “recent political uncertainty and volatility in global trading, specifically the Trump administration’s rapidly changing tariffs, have thrown a spotlight on global supply chains: how fast can your supply chain react? The current pace of policy U-turns and brinkmanship make clear that businesses need to move faster than the disruption.” Event-based integration, he says, allows supply chain IT systems to simulate policy changes in real time and adjust sourcing or logistics strategies immediately. “Can your supply chain IT support an adaptive supply chain?” he asks.
Manufacturers are also clear on the kind of help they want. Thompson points to “simplifying and clarifying Rules of Origin compliance” and “investment incentives for automation and digital transformation” as high on the list. Grants, tax breaks and shared best practice could all help offset upfront costs and accelerate adoption. The consensus across industry is that automation and digitalisation are moving higher up the agenda, but progress will not be uniform. Some firms will press ahead, especially in tariff-exposed sectors or where digital transformation was already underway. Others will hold back until margins improve or policy stabilises. What is clear is that the new tariff regime has raised the stakes — and the cost of delay.
