US President Donald Trump called it “Liberation Day.” The day he announced tariffs that would apply to countries around the world.
But for many businesses across the United Kingdom and European Union, the tariffs didn’t feel like liberation. Rather, they represent an obstacle to trade, the potential for market turmoil and a new challenge to build profits and stay ahead of business goals.
Since then, the UK and US have negotiated a tariff deal, changing the landscape yet again—adding new opportunities, but leaving behind some challenges UK businesses still need to navigate. And while the EU has entered trade talks of its own, they face tariffs of 20% at the time of this publishing, with higher rates for some industries.
So, what exactly will the impact of US tariffs be on UK businesses, or those in the EU? Which industries can expect to be hit the hardest? And what can FP&A teams do to help their businesses meet those challenges and remain competitive in this changing market?
Understanding the US Tariffs
Most countries do apply tariffs on specific goods to protect their local economies by giving domestic goods a price advantage for local buyers.
But tariffs can also come with potential dangers. This kind of protectionist mindset can disrupt supply chains, stifle innovation and reduce economic growth. Tariffs can also raise expenses for local manufacturers—costs that may ultimately be passed on to the consumer.
While President Trump has been talking tariffs since the beginning of 2025, originally he focused his attentions exclusively on Canada, Mexico and China. He started shifting to a more global approach in March, announcing his new tariff strategy on 2 April 2025.
This included a “baseline” 10% tariff on almost all imported goods coming into the United States, with higher rates for specific regions—including the EU.
Since the UK exports more to the US than they import—otherwise known as a trade surplus—the baseline 10% tariffs applied to most industries across the UK, with higher tariffs announced on specific goods like automobiles. The EU faces additional “reciprocal tariffs,” bringing it up to 20% across the board, again with higher industry-specific tariffs.
That wasn’t the end of the story, though—at least not in the UK. At the beginning of May, a tariff deal was announced between the UK and US—the first such deal to be made since Trump first announced his plan.
As per the agreement, the 10% baseline tariff on British imports remains, but automobiles (up to a cap of 100,000 cars) will be tariffed at 10% as well, instead of the higher 25% originally applied. Tariffs on steel and aluminum, also 25% previously, will be eliminated.
But, there are still industries that are not covered in the agreement at all—including pharmaceuticals and filmmaking, which Trump has suggested he may choose to tariff as well.
That, in addition to the 10% baseline tariff that still applies in the UK, has left many industries across the country wondering what will come next. And so far, EU businesses are left with even higher tariffs—and even more questions.
Organisations across both regions want to know how to react to the market changes that threaten to arise as a result.
Some industries should expect to be impacted more than others. And in that event, their FP&A teams will have unique challenges to contend with.
The Impact of US Tariffs on UK and EU Industry
For UK and EU FP&A teams, the challenge is to stay profitable and remain on top of growth goals even with tariffs in place.
These are some of the industries hit hardest by the new tariffs, and the specific challenges FP&A teams should expect.
These challenges are only exacerbated when you don’t have the tools, tactics and processes in place to model and adapt to market changes quickly.
1. Manufacturing and Industrial Goods
Manufacturing and industrial goods make up a large percentage of both exports and imports between the UK and the US.
In 2024 alone, for example, the UK imported £20.1 billion worth of machinery and transport equipment and exported £29.1 billion of the same. The US also represents the second most important export market for UK steel, after the EU.
For those reasons alone, manufacturers are vulnerable to the new tariffs in play. And while the elimination of tariffs on aluminum and steel was a positive step forward, there is still some uncertainty as to what comes next for the industry as a whole.
The Challenge for FP&A
In manufacturing, any kind of tariff can significantly eat into already slim profit margins. To make matters worse, traditionally slow budgeting processes also make it difficult for UK and EU manufacturers to react to market changes quickly. To stay resilient, FP&A teams need a better way to stay on top of market shifts, so that they can rapidly assess cost impacts and remain proactive to market volatility as a whole.
2. Agriculture and Food Products
The UK-US tariff agreement allows some agriculture and food product businesses to export to the US tariff-free. For instance, the UK is able to export 13,000 metric tonnes of beef to the US without any tariffs applied.
But the agreement also means the UK must remove its own 20% tariffs on US beef imports, meaning more competition on the home front from US producers. That leaves some questions open in terms of how the US tariffs will impact UK agriculture businesses overall.
And EU agriculture businesses don’t have the same reprieve on US tariffs as their UK counterparts right now, meaning they’ll be hit even harder.
The agriculture industry is one that’s highly sensitive to trade disruptions and import/export tariffs, so time will only tell how it reacts to the new sales environment.
The Challenge for FP&A
FP&A teams working in the agriculture sector have traditionally been challenged by a lack of responsiveness in their forecasting, which has stymied their ability to look ahead. To remain proactive and stay agile in a shifting market, they need better ways to anticipate change and adapt to supply-chain volatility quickly.
3. Retail and Consumer Goods
Even prior to the US tariff announcement, UK consumers were curbing their shopping habits, with five percent fewer people entering UK high street stores in March 2025. This could be in part because of market fluctuations at the time.
The tariffs have only added to that volatility, slowing economic growth in the UK and introducing concerns of an upcoming recession.
Add to that the possibility of cost increases at the retail level—introduced because many manufacturers have no choice but to pass on the price hikes caused by tariffs to their customers—and the retail industry is especially vulnerable.
Retailers often have thin profit margins, but they also operate in price-sensitive markets. This means passing on those price increases can impact consumer interest in their products, ultimately impacting sales.
The Challenge for FP&A
In the retail sector, inefficient SKU repricing makes it hard to adjust pricing dynamically in response to market volatility—making it difficult in turn to maximise profitability in times of change. Slow visibility into profitability shifts also means it’s challenging for FP&A teams to stay proactive and agile.
4. Automotives
While the 10% tariffs set out in the UK-US tariff deal are better than the 25% originally announced, thin profit margins across the UK automotive industry mean it’s still likely to be impacted significantly.
The EU automotive industry, meanwhile, still has to contend with the elevated 25% tariff that the US has set across the sector globally.
And that’s just the start. The automotive industry also relies on a complex global supply chain—opening up further vulnerabilities, as UK and EU automakers face potential price hikes on parts imported from countries contending with US tariffs themselves.
The Challenge for FP&A
FP&A teams in the automotive industry have traditionally found themselves challenged with a lack of agility, held back by limited scenario modeling and difficulty adjusting their forecasts quickly. This makes it harder for them to look ahead and adjust their business accordingly when faced with new challenges like those the tariffs bring.
3 Ways FP&A Teams in the UK and EU Can Plan for US Tariffs
If you’re an FP&A team planning for the future, you need a strong foundation of data-driven insights you can draw on if you want your business to remain competitive through the current market turmoil.
Achieving that starts with having the right FP&A tools, tactics and processes in place. Here are some ways FP&A teams can help their businesses navigate the evolving US tariffs and continue to thrive, even during these turbulent times.
1. Enhancing Agility Through Scenario Planning
When you’re faced with market shifts, changing suppliers or investing in a different product sales plan could be the best way to keep your business on track. Making the right changes starts by first understanding the possible outcomes those decisions will bring.
Asking “what if” through scenario planning can help you do that, giving you the insights you need to understand the risks and benefits of every possible path.
For instance, you could look at what 10% tariffs mean for your business and where you can make changes to lessen the impact. You can examine how much each scenario will affect your cost of goods sold (COGS) and revenue. Or how much added cost your business can absorb before your bottom line is impacted.
In our current environment, asking those “what ifs” is more important than ever. So much so that some of my clients have shifted away from reporting or analytics projects midway through, to focus more on scenario planning.
And as the tariff situation changes, scenario planning can help you stay ready—prepared to shift your business strategy to meet those new market needs as well.
2. Helping To Make Tough Decisions
Scenario planning can help FP&A teams look ahead and stay agile to change. It can also help you understand when tough decisions need to be made.
For instance, your analysis may tell you that you can absorb the cost of tariffs for six to nine months. But, you’ll still need a plan for when those six to nine months are up.
Fortunately, FP&A teams can help there as well, providing data-driven insights that will help the business make better-informed decisions, so that you know when and how to pivot your plans. For example, some of my clients have introduced “tariff engineering,” making changes to their supply chain to move goods through a third country, with minor adjustments to avoid potential tariffs.
Driver-based models can help you determine which areas of the business will be hit the hardest, where changes can be made and how to meet the new demands you’re faced with.
3. Tracking Expenditures and Cash Flow
Shifting market conditions can sometimes be a wake-up call, showing FP&A teams that change is necessary in your business. And by tracking capital expenditures (CAPEX) and establishing a clear visibility into cash flow, your FP&A team is in the best position to understand when those changes need to be made.
For instance, you can get a sense of when you should localise production, consider tariff engineering, or explore a new business model.
For many businesses, that type of planning is slow—making it more difficult to shift quickly in the face of market pressure. But with a real-time view of cash flow and expenditures, you can shift more quickly and plan on the fly, staying agile to change.
By doing so, you can turn those changes into opportunities in the making, by becoming more competitive in the new market environment.
The right FP&A tool can help you achieve that.
Why Having the Right FP&A Systems Matters
To guide your business through market changes like the new US tariffs, FP&A teams need real-time access to data from across the business.
Despite the need for a centralised source of up-to-the-minute data, many organisations today are still relying exclusively on disparate Excel sheets, limiting their options and the insights they can achieve.
Or, they’re using an inflexible legacy system that hinders their agility and delays decision-making because it doesn’t offer the quick insights they need.
To remedy that, businesses should be looking for a purpose-built FP&A solution that can help with:
That’s where Vena comes in.
How Vena Can Help
Vena’s FP&A software is flexible to your planning, forecasting and scenario analysis requirements. And with an Excel-native interface, it lets FP&A teams work in an environment they’re used to, while accessing more complex functionality customised to their needs.
This helps FP&A teams get insights faster, while a central database creates a single organisation-wide source of truth.
