HSBC UK trade survey: businesses on front foot over tariffs
*** Proactive businesses plan to diversify their export markets, supply chains and products or services.*** *** More companies seeking growth by utilising Free Trade Agreements.*** *** Expanding international businesses more confident of creating new UK jobs than domestic-only counterparts.***
Businesses have taken positive action and changed how they trade amid heightened uncertainty in the global trade environment, a HSBC UK survey has revealed.
Far from reducing their international operations, businesses which identified tariffs as a challenge have been diversifying and seeking out new markets.
The HSBC survey of 1,500 businesses conducted in November 2024, reveals half of businesses (50%) plan to expand into countries with lower trade barriers, 41% intend to diversify their supply chain and 31% are looking to bring a greater amount of the chain in-house.
Other examples of how businesses are being proactive in response to tariffs include expanding their products and services (41%) and increasing their prices (39%).
Only 15% said they will reduce their international activity.
Tariffs were considered a challenge by 38% of businesses trading in goods who would feel a greater impact, while only 18% of service providers felt the same way.
HSBC UK launched the third volume of its ‘Going global for growth’ report at the UK Trade & Export Finance Forum in London today (February 6).
Stuart Tait, Head of Commercial Banking at HSBC UK, said:
“Commentary around changes to tariffs has not reduced the appetite of UK businesses to trade internationally.
“Far from retreating to more cautious positions, our report highlights how growing businesses remain as ambitious as ever and are adapting to changes as they arise.
“Businesses are finding creative ways to ensure they continue to trade overseas successfully, whether that’s looking to different international markets or diversifying their supply chains.”
Minister for Services, Small Business and Exports Gareth Thomas said:
“Economic growth is the number one mission of this Government and a key part of our Plan for Change.
“Trade is central to that mission and I’m delighted this report sets out the major role it plays in helping to create jobs and put money back in working people’s pockets.
“It’s great to see so many British businesses trading internationally and seeking out new markets, with more aspiring to. We are committed to doing everything we can to help them grow and increase their footprint around the world by removing barriers to trade and striking deals with global trading partners.”
Global opportunities and Free Trade Agreements
The European Union (EU) remains the first port of call for many UK businesses buying and selling goods and services overseas, targeted by 72% of international companies, down from 84% in 2023.
Hot on its heels is the United States, where 57% of international businesses are active, followed by Canada (40%), China (34%) and the Middle East and North Africa (28%).
The research reveals a rise in the number of businesses already active overseas which are considering planning to acquire other companies, up 7% from 2023 to 22%.
Meanwhile there has been an increase in the number of businesses making use of Free Trade Agreements (FTAs), from 19% in 2023 to 29%. A further 33% are actively considering how to take advantage of FTAs, up from 21%.
Stuart Tait, added: “A free trade agreement provides businesses with more certainty and security - around areas like costs, product standards and dispute resolution - which can turn a promising market into a real growth opportunity.
“Keeping ahead of free trade deals, and pivoting to new markets, can provide businesses with a competitive edge.”
Rewards of trading internationally
Businesses surveyed were emphatic about the gains they have experienced from being active beyond the UK’s borders.
Nearly three-quarters (71%) said trading internationally had been positive for sales and nearly two-thirds (62%) said it had boosted their competitiveness.
Other benefits reported include a positive impact on customer service (64%), risk management (53%) and costs (51%).
In terms of hopes for the future, 70% of international businesses were optimistic compared to 48% of domestic-focused businesses.
More than four-fifths (82%) of businesses that trade overseas plan to grow over the next two years, with 35% aiming for significant growth.
And nearly three-quarters (73%) of international businesses looking to grow believe it will lead to job creation in the UK, compared to 35% of their domestic-only counterparts.
Media enquiries to:
Robert Cox, Media Relations, HSBC UK, robert.cox@hsbc.com
Notes to Editors:
The Going global for growth report captures the views of more than 1,500 businesses in every sector of the economy, and from across the UK. Read the full report here.
HSBC UK
HSBC UK serves over 14.9 million active customers across the UK, supported by 23,700 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium businesses and large corporates. HSBC UK is a ring-fenced bank and wholly-owned subsidiary of HSBC Holdings plc. HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 60 countries and territories. With assets of US$3,099bn at 30 September 2024, HSBC is one of the world’s largest banking and financial services organisations.