More than three quarters of UK firms are concerned about the impact of rising nationalism and trade tariffs on the strength of their business, according to a survey.
The survey, by recruiters Odgers Berndtson, found 17.1% of CEOs and chairs were “extremely concerned” and a further 60% were either quite or very concerned.
The research comes amid an ongoing trade dispute between the US and China, with tit-for-tat tariffs being imposed by both sides, and political wrangles over Brexit.
The poll, involving 100 companies, found 54.6% of respondents were “not very confident” about the medium-term outlook for the UK economy. Some 39.8% were either reasonably or quite confident, while 2.8% were “terrified”. The same proportion, 2.8%, were “bullish”.
More than two thirds of respondents (68.5%) felt the growing prosperity and influence of China was “broadly positive” for UK business, while 10.2% said it was “broadly negative” and a fifth (21.3%) said it made no difference.
Lucy Harding, head of procurement and supply chain at Odgers Berndtson, said: “The rules of global trade are in flux. Companies haven’t had to think about global trading relationships between the major trading blocks in recent years because things have been fairly stable – but now they’re not.
“It’s creating a new strategic awareness of the importance of effective management of global supply chains and the importance of this for companies to manage costs in a volatile global economy.”
Harding said tariffs would most likely impact more regulated, technology-led industries and firms importing finished goods manufactured in low-cost economies such as China.
“These are products where they can’t easily switch the source of supply or manufacture immediately,” she said.
“In the short term therefore an increase in the cost of raw materials as a result of tariffs or exchange rate fluctuations may force them to increase the price of the product, hitting the consumer in the short term at least.
“When it comes to ‘trinkets and trash’ (typically low value, commodity items), the trade tariffs won’t make a big difference because many companies can just switch to another cheap source of products in other countries south east asia or source more locally.”
Colin Wong, partner at Odgers Berndtson Hong Kong, said the trade war could create opportunities. “Countries like UK, Germany, France, Holland could benefit from more trade to both US and China, especially for industries like pharma and agriculture,” he said.
“This is a real opportunity for UK companies to showcase more of what they can offer to the China market.”
☛ Want to stay up to date with the news? Sign up to our daily bulletin.