Two thirds of British businesses that import from European suppliers have penned Brexit clauses which would let them renegotiate if tariffs are introduced after the UK leaves the EU.
British firms are set to bear the cost of any tariffs when they buy components from inside the EU when the UK leaves. This could be passed on to consumers with more expensive end products.
“These potential additional costs are being written into contracts ahead of time,” said John Glen, an economist at the Chartered Institute of Procurement and Supply.
The CIPS surveyed 817 chain managers in the UK and EU and found that companies are struggling to prepare for Brexit, still mooted for 31 October.
“Where this would be particularly damaging is SMEs (small and medium-sized enterprises) who are not flush with cash,” Glen said.
Businesses have being forced to tackle the uncertainty of Brexit as, with only weeks to go, there is no clarity on what form Britain’s exit from the bloc will take.
Prime Minister Boris Johnson has said he will take the country out “do or die” – without a deal if necessary.
This would cause World Trade Organisation rules to be applied at the border, these include tariffs on many products.
Only 22 per cent of British firms in the survey think they have the right paperwork to trade outside the EU.