EY-Parthenon CEO Outlook finds geopolitical tension at top of corporate agenda
UK CEOs are adjusting their strategic investment plans as geopolitical, macroeconomic and trade uncertainties continue to disrupt global markets. According to the latest EY-Parthenon CEO Outlook, more than nine-in-ten UK CEOs expect to actively pursue transaction initiatives over the next 12 months.
2025 has been a year of eternal market turmoil – with Donald Trump’s will-they-won’t-they tariffs causing endless disruption to the US’ trade partners. Having threatened huge 125% spikes in tariffs for certain goods from China at the start of the year, the US has since backed down when China threatened to match that 125% rate on US goods heading to China.
The American government has since agreed to a 90-day ‘pause’, during which US tariffs on Chinese exports will fall by 30%, and China’s tariffs on US imports will also fall by 10%. But while the US might have capitulated when it comes to China, the Trump administration has instead settled on making an example of Europe – with the threat of 50% tariffs if trade discussions do not turn out more favourably for America.
Amid this chaotic environment, a new study from Big Four strategy label EY-Parthenon has found that geopolitical risk management now tops the corporate agenda around the world. Forming a critical pillar of strategic planning, as the formerly globalised economy fragments amid various wars – trade or otherwise – has become a key goal in the immediate term, as supply chains built over decades could now unravel with alarming speed.
Globally, EY-Parthenon found that 42% of CEOs viewed geopolitical and trade uncertainty as the biggest growth challenge they faced in 2025. This was the level of concern at a European level – but even higher in the UK, where 45% of all respondents were very or extremely concerned about potential tariff increases impacting their company’s operations and sales in the coming year.
Around the world, CEOs are already acting to mitigate geopolitical risks prior to recent tariff tensions. An 85% majority had made alterations to their strategic investment plans over the past 12 months, and more than half of those had delayed a planned investment. But despite being more worried, fewer UK CEOs acted in this case – with 83% of UK CEOs having adjusted their investment strategies due to trade policy developments. Of those, 39% have relocated operational assets to different geographies, while 26% have exited specific geographic markets altogether.
The survey, which evaluated the optimism levels of 100 UK CEOs, found that there were other forms of action which leaders were turning to, though. Diversifying all stages of operations increasingly looks to be an answer for them. For example, 48% plan to diversify their supply chains by shifting production or sourcing to non-tariff regions, while 44% are exploring domestic sourcing alternatives, and rebuilding supply networks locally.
At the same time, looking ahead, 97% of UK CEOs expect to actively pursue transaction initiatives over the next 12 months, with 60% focusing on mergers and acquisitions. The focus of acquisition strategies includes acquiring companies for their technology or intellectual property, at 37%, and complementary businesses to enhance capabilities, cited by 35% of CEOs.
Silvia Rindone, EY UK&I managing partner for EY-Parthenon, commented, “CEOs are navigating an extraordinary combination of structural, political, and economic headwinds that are reshaping the landscape for traditional forecasting. In this climate of heightened uncertainty, agility and innovation must underpin strategic decision-making. Businesses that embrace adaptability, either by diversifying supply chains or harnessing technology, will be better equipped to manage immediate pressures, such as the current global trade disruption, and build resilience for the future.”
