Insights from Andrew Watkinson, Managing Director at CPiO, on navigating tariffs, supply chain risks, and financial uncertainty
I’ve been tracking the impacts of global trade volatility for a long time, but even I find the current situation deeply unsettling. The ripple effects of recent tariff shifts and supply chain shocks are no longer theoretical; they’re making themselves felt in the day-to-day decision-making of UK SMEs.
Our latest research, ‘International Tariff Turmoil: How Global Trade Policy is Rewriting UK SME Finance Strategy’, confirms just how severe things have become.
Survey findings: the real impact on finance decisions
We found that 68% of SME finance decision-makers report a high impact on their short and medium-term investment plans. Over half (56%) have seen their sales pipelines shrink by up to 40%, as well as 70% say that supply chain risk has increased since the tariffs began.
Internal challenges amplify external pressures
Yet the deeper problem, in my view, lies inside organisations. Nearly half of finance leaders say they struggle to model what comes next; the same proportion points to leadership indecision as a barrier to action. Almost one in five describe tariffs as having a very high influence on their business strategy. When a financial team cannot provide trusted forecasts and robust scenario planning, leaders find themselves frozen, even as external pressures mount.
Case studies: automotive sector under pressure
The wider business landscape reflects that same strain. UK vehicle output in August fell by more than 18% year-on-year, marking one of the weakest months in recent memory. Much of that decline followed the cyberattack that temporarily halted Jaguar Land Rover’s production and disrupted supply chains across the automotive sector. Production at JLR has only just begun a phased restart, with full operations not expected for several weeks.
At the same time, Aston Martin has issued a fresh profit warning, pointing to US trade tariffs and weaker global demand as key factors behind a deeper-than-expected annual loss. The company also acknowledged that the ongoing disruption from the JLR shutdown is adding further pressure to an already fragile supply network.
Economic slowdown and wider business implications
These incidents highlight how quickly tariff turbulence and supply chain disruption can ripple through multiple sectors. They also show that challenges once confined to large multinationals are now hitting smaller manufacturers and suppliers directly.
SMEs are caught in a squeeze; tariffs distort cost and pricing, supply chains buckle under disruption and internal systems struggle to adapt.
We’re seeing similar effects in the broader economy. Growth slowed to 0.3% in the second quarter, down from 0.7% earlier in the year and analysts warn that business investment and productivity could dip again before year-end.
The cost of indecision for SMEs
Many SMEs are responding cautiously; pausing spending plans, delaying investment decisions and waiting for clarity on both trade and tax policy. But in my experience, waiting rarely helps.
When businesses pause decision-making, indecision quickly becomes the default. Capital sits idle, opportunities are missed and confidence erodes. It’s a vicious circle, one that can only be broken by taking control of what we can influence.
Building resilience through financial agility
At CPiO, we work with SMEs that are determined to become more resilient, regardless of external uncertainty. I’ve seen first-hand how modern financial management systems and data-driven insights can transform performance. When finance teams have the right tools, they can model multiple outcomes, assess risk in real time and give leadership the confidence to act decisively.
That’s what real resilience looks like; being able to respond to change, not just survive it. In volatile times, clarity is power. The ability to see what’s coming, to test different scenarios and to make swift adjustments separates businesses that grow from those that stall.
Turning uncertainty into opportunity
Trade tariffs and global disruptions are here to stay, at least for now. But waiting for stability before taking action isn’t a strategy, it’s a risk. Businesses that modernise now, investing in systems, people and processes that enhance agility, will be best placed to navigate whatever comes next.
The research paints a clear picture of both risk and opportunity. The risks are immediate, shrinking pipelines, fragile supply chains and internal indecision. But there’s also enormous potential for those ready to act.
By improving visibility, embracing digital tools and building financial agility, SMEs can turn uncertainty into action and position themselves for long-term success. Tariffs may be beyond our control, but preparation isn’t.
Conclusion: preparation is key
The businesses that take charge of their systems and data today will be the ones leading tomorrow. In times like these, decisiveness isn’t just an advantage; it’s a necessity.