Tariff Turmoil Clouds SME Planning

Fresh uncertainty over US trade policy is complicating planning for businesses, particularly small and medium-sized enterprises navigating pricing, inventory and investment decisions amid renewed tariff volatility.

A US Supreme Court ruling last week voided most of the tariffs imposed by President Donald Trump last year, finding that the emergency law used did not authorise such measures. In response, the administration proposed a new global levy of initially 10%, later raised to 15%, potentially lasting five months while alternative legal pathways are explored. The scope of products affected, applicable rates and country coverage remain unclear, reviving conditions reminiscent of early 2025 when trade measures shifted rapidly.

For SMEs, which often lack the balance sheet flexibility of larger corporates, the fluid environment presents operational challenges. Businesses that had adjusted pricing and supply chains to accommodate higher tariffs must now reassess whether to restock inventories during the temporary reprieve, seek refunds, or delay capital expenditure and hiring. Gregory Daco, chief economist at EY-Parthenon, said the absence of a stable framework makes planning difficult, noting that tariffs have fluctuated by country and product and may continue to do so.

European Central Bank president Christine Lagarde underscored the need for predictable rules, arguing that companies require clarity before committing to trade and investment decisions. Justice Neil Gorsuch, writing in support of the court’s majority, similarly highlighted the value of legislative processes in producing durable policy that allows businesses to plan.

Economists had recently expressed a more positive outlook for the US economy, with a National Association for Business Economics survey showing most respondents do not expect a recession within a year. However, Bernard Yaros of Oxford Economics warned that even if effective tariff rates fall in the near term, prolonged uncertainty could offset any short-term gains.

For SMEs balancing cost pressures with growth ambitions, the shifting trade regime introduces renewed risk at a moment when many had hoped policy conditions were stabilising.