A strategic response to the US-EU Trade Framework
Guidance on navigating a new era of global trade
An immediate cross-functional response is essential to build commercial resilience as businesses navigate the fundamental disruption.
The US-EU Trade Framework is sealed at 15%. While the agreement text is still being finalised, and certain sectoral carve outs are to be completed, there is now a degree of certainty on two fronts – the trading landscape has fundamentally shifted, and the tactical agreements on how to share original tariffs will now be reset to more permanent effects.
The deal accentuates the challenge faced by export-focussed industries in Ireland, the fight for now even slimmer operating margins, further amplified by unfavourable currency exchange rates – exposing inflexible commercial and supply chain.
This is a persistent reality for the foreseeable – 15% deal gave customers and suppliers a ‘green light’ to act and aggressively renegotiate their positions.
In this environment, only those who move beyond reactive measures and adopt an integrated, cross-functional resilience strategy will sustain growth and profitability.
Businesses should immediately respond through:
- Leading with commercial readiness
- Mobilise strategic planning - this is not a business-as-usual moment
- Execute to protect value
We have been successfully advising clients to navigate this trade disruption. Our experience is that those who take an end-to-end approach, make data driven decisions, and execute consistently will outperform more passive peers.
Trade Turbulence: A Persistent Reality
The US and EU have sealed a new trade deal on Sunday 27th of July, imposing a 15% tariff on most EU goods entering the US. While ‘15% deal’ capped the potential 30% threat, the scale of tariffs disruption will be unprecedented for the impacted Irish industries with already pressured operating margins, including pharmaceuticals (12-18% OPM), food & beverage (5-10% OPM) and industrial products (9-11% OPM).
The 15% tariff is compounded by a 12% year-to-date US dollar slide against the euro, a double hit that erodes price competitiveness just as Irish exporters face their weakest volume growth in three years. The trend of US dollar depreciation is likely to continue further, boosted by the speculative US interest rates cuts. Irish exporters have already been grappling with a broken growth engine, with volumes declining over the past three years. 9 out of 10 top players now rely on price-led growth (Analysis of exporters’ performance metrics from S&P Capital IQ and company filings).
The shift in US trade policy indicates a broader realignment of global trade norms. Tariffs in combination with pre-existing external headwinds are creating sustained uncertainty, exposing inflexible commercial and supply models.
In our experience, businesses that succeed during turbulent times are those that prepare, engage and diversify efforts, as highlighted at the recent Business Post Global Trade Summit in association with Deloitte. A tailored approach across response functions will be needed, but the journey starts with strategy for resilience building.
1. Lead with Commercial Readiness
The trade deal ‘certainty’ has prompted aggressive negotiations between customers and suppliers. Commercial planning plays a crucial role in defending margins. Tariffs have turned pricing into a delicate balance between protecting margins in the short term and retaining customers in the long term. Deloitte’s Commercial Risk Classification Matrix and Practical Guide outlines three key commercial dimensions (product leverage, customer evaluation and deal economics and feasibility) and appropriate tactics that can support this shift.
Figute 1: Deloitte Commercial Risk Classification Matrix
Where pricing risks eroding customer trust or competitive positioning, combined with pre-existing decline in volume, it will take other commercial levers, holistic cost transformation, M&A and portfolio optimisation to navigate the market and unlock new growth.This is a fundamental starting point to building resilience – by protecting profitability and commencing strategic planning.
2. Building Resilience: Mobilise Strategic Planning
This 15% deal will disrupt all players across the value chain – manufacturers, suppliers, competitors, customers and end consumers. Our experience points to a “end to end” response, aligning strategic focus of the business – beyond business-as-usual. These five capabilities operate with an enhanced performance mandate and at higher intensity, delivering critical insights and enabling fast, data-driven decisions.
a. Commercial Excellence and Customer Relations: Protect margins without eroding market position. Once you have assessed commercial risks (per matrix above), focus on empowering your teams with the right data and tools to protect existing value from tariffs and unlock new growth.
b. Supplier Partnerships and Supply Chain: Map your supplier network strengthen strategic partnerships and align supply chain decisions with commercial priorities to improve cost resilience and delivery certainty.
c. Operations and Manufacturing: Explore the feasibility of re-aligning production to mitigate tariffs. Where relocation is viable, it is critical to clearly understand cost-benefit (your leadership capability to affect this change) and the long-term commercial potential for associated product lines.
d. Regulatory, Tax and Legal: Proactively manage compliance to minimise cross-border trade exposure to avoidable tariffs. Classify products accurately, revisit value for customs purposes, and leverage available reliefs or incentives while shaping policy discussions that influence industry outcomes.
e. Financial Planning: Use current momentum to plan cost transformation and cashflow optimisation. Invest in cross-functional initiatives for tariffs mitigation in both the immediate and long term.
3. Execute to Protect Value
In moments of structural disruption, fast execution is the true differentiator. Our approach involves ramping up cross functional cadence to challenge competing priorities and drive buy-in on decisions. This must be informed by on the ground insight representing stakeholders across the value chain, e.g. customer and supplier feedback, emerging regulatory implications. Set commitment to take data-driven decisions in real time.
Map, Decide, Act
The 15% tariff realignment signals a lasting shift in the rules of engagement, where speed agility and clarity of action will separate the market leaders from the rest. Resilience and agility are now the new advantages. As we’ve learned through COVID, inflation cycles, and tariff journey to date, companies with embedded commercial and supply chain agility - those that can map, decide, and act quickly - will consistently outperform slower peers.
For many businesses, this trade deal marks the start of a new commercial reality. At Deloitte, we partner with organisations to navigate complexity and capture opportunity. Whether you are adjusting your cost base, pulling the right commercial levers to defend margins, or optimising your global production and supply models, our Deloitte Ireland Strategy Team are ready to lead with actionable solutions.
Explore our Global Trade Strategy & Resilience Hub for more information on our firm-wide capabilities and insights.
