Business leaders have been warned to “stay calm” as coverage of statements from the US on the possibility of a sharp increase in tariffs becomes increasingly shrill.

Mark Kennedy, partner at Forvis Mazars, was looking ahead to next year, and said he did not think the business world in either Europe or the UK is looking at a “catastrophic or uncontrollable looking future,” as a result of the upcoming transfer of power at the White House.

“If I’m running a large European business, I’m certainly going to make an educated assessment of whether either inputs to my business, or products of service that I’m providing, are going to be affected by potential tariffs from the US,” said Kennedy.

But he adds: “I’m definitely not panicking and I’m making reasonable choices and probably far more focused on issues like technological transformation, which is a challenge to every business; getting the right people in the right roles, which is a challenge to every business; and probably trying to assess what’s my capital looking like, given the interest rate paradigm has shifted a bit.”

Kennedy’s comments come in the latest Macro Memo podcast, the last one of 2024, looking ahead to developments in global economics and trade next year.

US trade tariffs

Following the US presidential election result, commentary has focused on the possibility of a trade war if the White House hikes trade tariffs on goods entering the US.

The podcast’s resident economist, George Lagarias of Forvis Mazars, agreed with Kennedy that statements so far are likely the opening position in a negotiation.

There has been talk of whether UK prime minister Sir Keir Starmer will have to choose between alignment with the US on trade or the EU. Chancellor Rachel Reeves is in Brussels talking up the possibility of closer ties with Europe.

Lagarias said there was “zero interest” in hostility between the UK and Europe. Lagarias believes the US is positioning itself to become more competitive with other trading blocs.

“The UK is Europe’s natural partner. And Europe—and as a European I will tell you—misses the UK on a number of levels, as part of its institutions.

“It is natural that these two entities come closer, especially as America now stands for competitive growth.”

Tune in to the latest episode of The Macro Memo podcast for analysis and expert insight about the impact of upcoming events on business and the economy, in partnership with Forvis Mazars.

Listen to the full podcast here

Watch the podcast video here