How Can Your Business Navigate Today’s Tariffs and Why Is Financial Flexibility Through Leasing Key?

The business world just got another shake-up. On April 9, the U.S. paused its planned tariff hikes—for most countries. The UK and China? Not so lucky.

UK exports are now facing increased costs as the U.S. leaves them out of its 90-day tariff freeze. Meanwhile, China fired back with 84% tariffs on U.S. goods, prompting the U.S. to hit back harder—raising tariffs on Chinese imports to 145%.

At the same time, Europe is easing tariffs, showing just how fast the global trade picture can flip.

For businesses, this is a wake-up call: financial flexibility isn’t just helpful—it’s essential. Smart leasing and financing options can give you the breathing room you need to weather unpredictable trade winds.

What’s Happened? The New Tariffs Explained

On April 2, 2025, the U.S. government announced reciprocal tariffs that affect a wide range of imports, including goods from the UK. These tariffs are set at 10% for the UK, while some other countries face even higher tariffs. For example, China is facing a 34% tariff, while the EU sees a 20% levy on exports.

For UK businesses that rely on exporting goods to the U.S.—from machinery and electronics to pharmaceuticals and vehicles—these tariffs could significantly raise costs. The immediate concern is how these increased tariffs will affect profit margins, especially for industries that rely heavily on importing components or exporting finished products to the U.S.

How Does This Affect Your Business?

The introduction of these tariffs can have a few major effects on UK businesses:

• Higher Costs for Imported Goods: Many UK businesses rely on imports from the U.S. and other countries that are now facing higher tariffs. This can drive up the costs of goods, raw materials, and even operational expenses. Businesses might have to decide whether to absorb these costs or pass them along to customers, both of which could impact margins and profitability.
• Inflationary Pressures: As businesses face higher production costs, these costs are likely to be passed down the supply chain. This could lead to higher prices for consumers, which means inflation. As prices rise, your customers might find themselves with less disposable income, potentially reducing demand for your products and services.
• Supply Chain Disruptions: The tariff changes could cause disruptions in global supply chains. Many businesses that rely on international suppliers may need to rethink their sourcing strategies to find more cost-effective or alternative options. This can create delays and inefficiencies, potentially stalling operations.
• Slower Economic Growth: If businesses cut back on their investments or raise prices in response to the tariffs, the overall economy could slow down. For smaller businesses especially, this might lead to a more cautious approach to spending, hiring, and expansion.

What Should Your Business Do?

The good news is that there are steps you can take to help mitigate the effects of these tariffs:

1. Stay Informed and Adapt: Keep an eye on tariff updates and adjust your pricing strategies, supply chains, and sourcing plans accordingly. It’s important to stay flexible and be ready to make changes when necessary.
2. Evaluate Your Supply Chain: Consider whether you need to diversify your suppliers or seek more cost-effective alternatives to manage the impact of increased costs. Maybe it’s time to look into local suppliers, or even reconsider how you manage imports and exports to reduce reliance on affected regions.
3. Look Into Alternative Markets: Expanding into new markets or focusing on domestic growth can help you reduce your dependence on markets that are heavily impacted by tariffs. Having multiple revenue streams can provide a cushion against economic slowdowns in one specific region.
4. Leverage Financial Flexibility: As your business faces higher costs, it’s important to think about how you’re managing your finances. Flexible lending, particularly through leasing, can help keep your cash flow steady, without the need for significant upfront capital.

Why Financial Flexibility Can Help

Leasing offers a way to maintain access to essential equipment and assets without the large, upfront cost. This can be a huge relief when you’re facing rising production costs or the potential slowdown of business growth.

Here’s how flexible lending, like leasing, can help:

• Preserve Cash Flow: With leasing, you can spread the cost of essential equipment or assets over time, freeing up cash for other areas of your business. This can help you continue operations smoothly, without having to make large upfront investments.
• Keep Your Business Agile: Leasing allows you to regularly update your equipment and technology, so you’re always working with the latest tools. In a rapidly changing market, staying ahead of the curve is crucial, and leasing helps you do just that without draining your working capital.
• Tax Efficiency: Lease payments are often tax-deductible, which could lower your overall taxable income. This can be a smart way to reduce your tax burden, especially when your business is dealing with higher costs due to tariffs.
• Mitigate Uncertainty: The flexibility of leasing gives you the ability to adjust your expenses as your business needs evolve. Whether you need to scale up or down in response to market conditions, leasing allows for more control over your finances, which is invaluable during uncertain times.

The Bottom Line

The new tariffs are a challenge for UK businesses, but they don’t have to be a death sentence.

By staying informed, rethinking your supply chain, and exploring alternative markets, you can weather the storm. But don’t forget the importance of financial flexibility. Leasing is one way to keep your cash flow stable, avoid large upfront costs, and ensure that your business has the agility to adapt to an unpredictable economic environment.

So, if you haven’t already, it’s time to explore how flexible lending can help your business remain resilient in the face of change.