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SMEs expect business costs to increase by average of 22% due to US tariffs

/ 18th June 2025 /
George Morahan

Four in 10 (40%) Irish firms have reported a deterioration in business confidence and are bracing for a downturn in cross-border trade as a result of trade tariffs.

A survey of 300 senior decision-makers at SMEs by financial services firm Ebury shows that more than a third (35%) expect their exports to decrease in the next 12 months while 4% expect they will cease exporting altogether.

Similarly, 32% of firms will decrease the amount they are importing and 4% plan to stop importing altogether over the same period.

When asked what the biggest drivers were, SMEs pointed to tariffs and trade barriers (31%), currency fluctuations (23%), geopolitical risks (23%), supply chain disruptions (19%) and increased operational costs (18%).

Nearly three-quarters (72%) of SMEs expect their business costs to increase as a consequence of the US tariffs, with these businesses predicting an average 22% uptick in costs.

Business Bulletin

Since the Liberation Day announcement, SMEs have responded in different ways, with nearly a fifth (18%) diversifying trading partners, 16% changing suppliers, 15% shouldering additional costs, while 12% have frozen hiring and 9% have laid off staff.

However, over a quarter (26%) say they haven’t taken any steps since the announcement, despite the uncertainty and the expectation of greater costs.

More than two in five (44%) SMEs are more concerned about future business uncertainty despite the recent temporary pause on US tariffs with China and broader signals of softening of White House trade policy, with 10% saying they are much more concerned.

The survey also revealed that nearly half (48%) of SMEs expect the euro to weaken against the dollar over the next six months, raising concerns about higher import costs, inflation, and pressure on margins for trading businesses.

tariffs
Donald Trump announcing his global tariff regime in April. (Pic: Chip Somodevilla/Getty Images)

“SMEs are the backbone of the Irish economy and recent GDP figures highlight just how critical exporting is to economic growth," said Robert Purdue, head of dealing in Ireland at Ebury.

"Yet our data shows that global trade tensions are clearly weighing on sentiment and trading activity. Despite a recent de-escalation in the trade war, many SMEs remain uneasy, not just about tariffs but also the wider volatility in currency markets and heightened geopolitical tension.

(Pic: Getty Images)

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