Rethinking Risk: What the April 2025 US Tariffs Mean for Regulated UK & EU Businesses Dependent on US-Based Services

This is not a political post; it’s purely to give a perspective on how to navigate the current landscape.

As of April 2025, the US introduced a sweeping package of tariffs on product imports. A new chapter in global trade is unfolding.

Some countries have immediately announced counter-tariffs, while others are biding their time and (presumably) negotiating behind the scenes.

But this is no longer just a concern for manufacturers or exporters. For organisations in regulated industries - finance, healthcare, legal, education, manufacturing - the real risk is subtler, but no less serious: What happens if US-based service providers become entangled in geopolitical crossfire?

This article explores why the potential countermeasures from UK and EU governments, in reaction to the 2025 US tariffs, should prompt businesses to assess their dependence on US-based vendors for critical services like cloud computing, data storage, and software infrastructure.

In Brief: What’s Changed?

The US administration’s decision to introduce new tariffs in April 2025 came as a surprise in its breadth. While goods were the initial focus, trade experts and policymakers in Brussels and London have warned that services - particularly digital and professional - may soon become entangled.

Early indicators from UK and EU leaders suggest that retaliatory tariffs or policy responses could extend into areas like cloud services, cybersecurity, and cross-border data transfers. Whether through formal legislation or informal regulatory scrutiny, the landscape is clearly shifting.

For regulated sectors already burdened with compliance complexity, this introduces a new and unpredictable layer of operational risk.

The Expanding Scope of Trade Risk: Services Are No Longer Safe

In the past, businesses could reasonably assume that digital services were somewhat immune from the turbulence of global trade disputes. After all, software isn’t shipped in containers, and servers aren’t stopped at borders.

But today’s political climate is different. Increasingly, data is infrastructure, and that infrastructure has become strategically important, and vulnerable.

Recent signals from the European Commission highlight growing concern over:

• US extraterritorial reach through export controls and sanctions.
• Non-compliance with EU data protection regimes like GDPR when using foreign processors.
• Cloud sovereignty issues, particularly in the public and healthcare sectors.

It’s clear: the risk of service-level disruption due to international tensions is now very real. And for regulated businesses, this isn’t just inconvenient.

The Strategic Risks of Us-Vendor Exclusivity

1. Legal & Regulatory Risk

Many regulated sectors are bound by strict compliance obligations - some of which can be jeopardised by foreign vendor exposure. For example:

• GDPR violations tied to third - country data transfers.
• UK and EU financial services regulations requiring localisation of critical operational infrastructure.
• US CLOUD Act conflicts, where US providers may be compelled to hand over data regardless of other international or local laws.

When geopolitical friction rises, these conflicts become harder to ignore - and regulators less forgiving.

2. Operational Risk

If your entire data stack or client delivery model is reliant on US- based providers, you have a single point of geopolitical failure.

Tariffs can be passed on as cost increases. Sanctions can result in sudden service suspensions. Export controls can restrict the availability of updates, security patches, or technical support. These are not theoretical risks anymore.

3. Reputational Risk

Clients - particularly institutional clients - are becoming increasingly aware of where and how their data is handled. Trust is fragile, and a perceived over-reliance on non-sovereign systems can raise red flags in procurement, security assessments, or even audits.

4. Financial & Cost Risk

Tariffs don't just hit goods - they raise operational costs. If a SaaS vendor passes on new compliance or legal costs due to international regulatory friction, those increases will likely land in your monthly invoice.

Diversification Is Now a Compliance Strategy

The solution isn't to abandon innovation or digital transformation - but to consider diversifying your digital supply chain and building operational resilience.

Forward-thinking organisations are doing the following:

• Engaging dual-vendor strategies to reduce single-jurisdiction risk.
• Adopting regional or local alternatives for data processing, storage, and collaboration.
• Ensuring data residency through EU- or UK-based cloud hosting options.
• Reviewing procurement policies to include geopolitical and compliance risk as part of vendor due diligence.

This isn’t about politics. It’s about risk management - and futureproofing your ability to operate no matter what direction global trade winds blow.

What Leading Organisations Are Doing Now

Some practical examples we’re seeing across regulated sectors:

• A UK-based financial firm is migrating part of its core operations from a US-based cloud provider to a UK-regulated alternative with full FCA compliance and in-country support.
• A European healthcare research network is implementing a hybrid architecture to ensure sensitive patient data remains within EU jurisdictions - even when third-party tools are used.
• A UK-based legal firm is replacing critical workflow tools with sovereign alternatives to maintain chain-of-custody clarity and reduce risk in case of international legal conflicts.

These decisions aren’t just technical, they’re strategic.

And they’re becoming more urgent by the month.

Your Checklist: Are You Overexposed?

Ask yourself the following:

• Do any of your core service vendors fall under US jurisdiction?
• Could a change in US or EU law materially affect your ability to operate?
• Are your cloud, storage, or analytics solutions compliant with local regulatory requirements, even under conflict conditions?
• Do you have viable alternatives in place if a major vendor becomes unavailable, non-compliant, or prohibitively expensive?

If the answer to any of these is “I’m not sure,” you have an exposure.

Conclusion: It’s Time to Audit Your Digital Risk Profile

The April 2025 tariffs are not an isolated event. They’re a signal that global digital trade is entering a more fragmented, politically charged era.

For UK and EU businesses operating in regulated industries, the cost of inaction is rising.

Now is the time to:

• Audit your vendor dependencies.
• Understand your jurisdictional exposure.
• Build resilience into your digital service stack.
• Explore sovereign or regional alternatives (there are many more than you might think) before risk becomes reality.

Because in today’s world, compliance and continuity depend not just on what services you use - but where they come from.

Need Help Getting Started?

Download our free Vendor Risk Audit Template or get in touch to discuss alternatives for digital services stack.