Navigating tariffs

In the first of a new Grant Thornton series on trending international insights, we examine the wider impact of tariffs on the mid-market, where a dip in market confidence at the start of 2025 was just the start of more to come. 

According to Grant Thornton's International Business Report (IBR) research, at the close of 2024,

54.6% of mid-market firms planned to increase their exports, with a similarly strong 50.3% expecting revenue growth from international markets. However, as we entered 2025 trade tensions escalated, with optimism experiencing its first notable dip in two years (down 2.9pp to 72.7%). 

Reshaping the global trade landscape

The current wave of new tariffs has proven both unexpected and unprecedented, with the OECD warning that they could take a “significant toll” on worldwide growth [i]. What began as isolated measures has morphed into an uncertain and complex global trade landscape, with the parameters changing on a near daily basis. And in a world where heavy trade barriers are part of everyday business, the ongoing disruption caused is very real. 

Reacting to unprecedented roadblocks

As opportunities in traditional global export markets continue to shift, businesses are facing the reality that new trade dynamics may significantly alter their growth trajectories. Firms now need to be more strategic than ever, maximising their value in domestic markets and looking to do more business regionally. 

What makes today’s volatile turnarounds on tariffs unprecedented however, is that throughout all of these prior crises the mid-market could focus on their portfolio of non-domestic business to grow despite market turbulence – today’s tariffs are diminishing that option, forcing firms to reassess their addressable markets and potentially adjust their business models. 

The mid-market advantage

In this constantly evolving landscape, the enduring principles that define the mid-market – focus, agility, and strong leadership – have never been more critical. These core attributes are what empower firms to respond swiftly to new challenges and pivot as needed. Strategic shifts are already being observed, with many companies now looking to concentrate on a select few markets with the most promising prospects – the number of countries businesses are looking to sell to has already decreased (down 3.7pp to 47.8%). 
This more focused approach not only maximises resource allocation but also enhances their ability to manage complex tariff-induced changes. 

Making tough decisions in a fragmented world

Vietnam’s mid-market firms are starting to feel the strain of rising trade barriers. According to the latest IBR data, optimism among business leaders has dropped significantly, with 79% now expecting a positive outlook for the coming year, compared to 88% in the previous survey. Appetite for international expansion is notably cooling. Export expectations, in particular, have fallen significantly from 76% to 60%, as the recent announcement by the U.S. to impose a 46% tariff on Vietnamese goods  (currently paused for 90 days)  adds new layers of complexity.

With challenges rising not only with the U.S. but also across other major export markets of Vietnam like China and the EU, many mid-market firms in Vietnam are beginning to rethink their strategies. The survey found that the percentage of businesses in the country planning to expand into new international markets fell sharply from 71% to 54%. It appears many firms are choosing to focus on strengthening their positions in existing markets rather than pursuing new ones. Nevertheless, the figures show that more than half of firms are still looking to expand the number of overseas markets, even in a far more volatile economic landscape. This is a noteworthy sign, as it suggests another approach to counter the current challenges - trade diversification, which could help businesses spread risks and tap into emerging opportunities. 

Charting a way forward through change

The global economy may suffer further as trade tensions and uncertainty persist, but if there’s a silver lining, its likely to be found in the mid-market – the most resilient and opportunistic segment of the business landscape.

Where strong scenario planning will be key and, for those who get it right, new doors may begin to open. In what seems like a zero-sum game of global tariffs, don’t be surprised if many mid-market firms emerge as unexpected winners. 
For more details on the global findings and analysis, read the full article here.