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Key strategies for European businesses navigating tariffs and greater uncertainty

Explore key strategies for European businesses to navigate tariffs and uncertainty, enhancing risk management and positioning for future growth opportunities.

Effective risk management is essential for businesses in Europe facing complex and evolving challenges.

Tariffs are just one aspect of the ongoing uncertainty. Companies across various industries and sectors are increasingly disrupted by geopolitical, environmental, societal, economic, and technological factors, all of which can affect their supply chains.

Hear from Maurizio Quintavalle and Bruno Dotti as they discuss the current risks facing European businesses, strategies to assess and quantify these risks, and how to position your company for future opportunities.

Beyond Tariffs: Preparing for Future Supply Chain Challenges

Risk considerations and mitigation strategies

Navigating a complex landscape

Businesses are encountering several risks that impact their supply chains:

Geopolitical risks from trade uncertainty, tariffs, armed conflicts, and social unrest.
Economic challenges such as slowing growth, rising unemployment, and inflation.
Extreme weather and climate-related risks from more frequent and severe hazards like droughts, forest fires, heatwaves, heavy rain, and flooding.

Potential solutions

As global trade dynamics shift, businesses need to understand how to position themselves for growth.

Continuous scenario analysis can assess the business implications of the evolving policy and economic landscape, allowing for better decision-making.
Physical climate risk modelling and risk engineering can also guide businesses in making informed decisions regarding climate-related risks, while business continuity planning is key for helping companies recover following a risk event.
Insurance can help mitigate the financial impact of geopolitical risks by offering coverage for events like political violence, trade disruptions, and asset expropriation.
Specific insurance solutions include political risk insurance, trade credit insurance, and business interruption insurance.

Organizing your response to tariff challenges

Several tariff scenarios could unfold. Tariff rates on Europe may be lowered through negotiation, they could be delayed, or additional tariffs may be implemented, prompting retaliatory actions from trading partners.

Given these possibilities, companies should take a measured and thoughtful approach to understanding their supply chain risks and risk management options. This may include:

Assessing the impact of tariffs on supply chains: Map and evaluate risks, including supply chain exposures, costs, supplier dependency, and production cycles.
Scenario planning: Analyse the potential impact of EU retaliatory tariffs. This analysis should cover supply chains, procurement, pricing, taxes, and competitive positioning.
Marsh McLennan’s Sentrisk^TM tool can help identify these potential supply chain risks across different tiers and explore alternative strategies.

Case study

A European-based manufacturing firm wanted to understand its supply chain vulnerability to potential disruptions caused by US tariffs on Mexico.

Sentrisk enabled the firm to quantify the potential impacts of the tariffs on its business by identifying, mapping, and visualising its entire supply chain. This highlighted multiple points where any proposed tariffs could have a knock-on impact on its suppliers. Ultimately, this supported the firm’s resilience strategy and informed contingency plans.

Position for future opportunities

As many risks facing European businesses are interconnected, ongoing risk assessment is critical for identifying, evaluating, and prioritising resilience efforts.

At Marsh, our teams help you measure, manage, and minimise risks, while anticipating future challenges and realising opportunities.

We offer specialised advice and solutions that help protect assets, enhance investment returns, and unlock growth opportunities across industries and regions.

Article

Key strategies for European businesses navigating tariffs and greater uncertainty

Effective risk management is essential for businesses in Europe facing complex and evolving challenges.