The DUP, supported by the UK government are adamant that there must be significant changes to the protocol, with Foreign Secretary Liz Truss announcing that the UK plan to legislate and implement those changes unilaterally.
While the EU and indeed the majority of parties at Stormont are in favour of the protocol - and if the recent elections are to be considered, so too, are the majority of the people of Northern Ireland - having voted in the majority for parties that support the protocol, the UK government seem determined to carry on with their campaign for change.
This is the backdrop to the latest Brexit duel, and in this article, Consultant, Bevis Wright discusses the steps you can take to prepare your business for any trade war.
What is a trade war?A trade war is when one country or bloc, impose quota restrictions or tariffs on another to damage their trade.
What does this mean for UK business?The worst-case scenario is the potential for the termination of the free trade deal that was reached post Brexit, but more likely, is the imposition of tariffs and quotas on UK exports.
This coupled with the cost-of-living crisis and the war in Ukraine, would have a devastating impact on the UK economy, and in particular on supermarket prices, with the industry warning of major problems should this happen.
How can you prepare for a trade war?As a business, you have no control over tariffs or other restrictions that could be imposed. However there are areas that can be adapted, including:
Price rises You can either absorb the increasing costs of importing/exporting and accept reduced margins or pass those rises onto your customers. In the current era of high inflation, many are seeing large price rises, and historic price pains for products have changed. This provides an ideal opportunity to maintain margins through increasing sale prices.
Change suppliersAre there suppliers who are local to you and who can supply products to you cheaper? This can also help with supply chain issues – if you find a supplier closer to you that is able to supply a product, it may even be worthwhile accepting a higher price for the continuity of supply and better working capital options.
EfficiencyCarry out a review of your business, are there areas where you could cut costs/run more efficiently, reducing operating costs, and saving money?
Automation Following the review of the business, are there any time-consuming manual processes that could be automated thereby saving time, improving margins and revenues, helping to absorb the impact of tariffs.
Digital supply chainSupply chains are fundamental to the smooth running of any operation. Digitising the supply chain, will enable both you and your suppliers to see real time information in terms of stock and orders enabling you to run at peak efficiency.
While a trade war is far from guaranteed, considering the steps suggested above will ensure your business is in the best possible shape for whatever the future brings.
For more information on how we can help you and your business, please contact us at firstname.lastname@example.org or call 02476673160.
Please note: This article is provided for information only and was correct as at time of writing (24/06/22). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.