In the dynamic landscape of international trade news, the past week has brought significant developments affecting UK-based importers and exporters. From shifts in global trade policies to domestic economic indicators, these changes have implications for businesses engaged in global trade. Below is a summary of the key news stories from the last seven days:
UK-EU ‘Lancaster House Agreements’ Reset Relations and Reduce Friction
On May 19, 2025, UK Prime Minister Keir Starmer and European Commission President Ursula von der Leyen signed the Lancaster House Agreements—a significant new phase in UK-EU post-Brexit cooperation. Designed to “stabilize and deepen” the relationship, the agreements provide a roadmap for streamlined trade, mutual investment, and joint defence initiatives.
Trade-related highlights include:
- Agrifood streamlining: Routine health and safety certificates for animal and plant-based goods have been abolished for most pre-approved shipments.
- Steel protections: A bespoke deal on British steel exports removes excess duties, potentially saving UK producers £25 million annually.
- Fisheries cooperation: A new framework clarifies quotas and joint conservation efforts, reducing uncertainty in this highly sensitive sector.
- Market access improvements: Financial services firms will enjoy extended “equivalence” on licensing through 2030, easing compliance headaches.
From a broader perspective, this agreement restores confidence in the UK-EU commercial corridor, particularly beneficial for sectors that rely heavily on frictionless trade: food, industrial manufacturing, chemicals, and finance.
The move also unlocks UK participation in the EU’s new £150 billion SAFE defence fund, opening up export opportunities for British aerospace and defence companies.
For importers and exporters, the Lancaster House Agreements represent a turning point—shifting the tone from divergence and disruption to integration and opportunity. Businesses should actively revisit EU supply chain partnerships, logistics arrangements, and regulatory strategy in light of this positive shift.
Trump’s 50% Tariff on EU Goods: A Windfall for UK Exporters
On May 20, 2025, U.S. President Donald Trump announced a sweeping 50% tariff on all EU exports to the U.S., effective June 1. Citing long-standing grievances over EU subsidies and regulatory barriers, this decision has sent shockwaves through European industries. Crucially for the UK, it is not included in these new tariffs due to its post-Brexit status.
This presents a golden opportunity for UK exporters. With EU competitors now facing steep cost disadvantages, UK companies can step in to fill supply gaps and capture lost market share in America. Sectors most likely to benefit include:
- Automotive: UK-made vehicles and parts, already enjoying a reputation for quality, now have a pricing edge over German and French counterparts.
- Pharmaceuticals and medical devices: Trusted UK products could gain traction as U.S. buyers pivot from EU-sourced goods.
- Luxury goods: Fashion, spirits, and cosmetics exporters stand to benefit as EU products become less cost-competitive.
Additionally, UK supply chain firms feeding into EU production lines may find new U.S. demand if American companies seek to “re-shore” or “friend-shore” away from the Continent.
However, UK exporters must move quickly. U.S. businesses will be actively seeking new sourcing partners, and those first to adapt stand to win long-term contracts and loyalty.
UK-U.S. Trade Deal: Incremental Gains Despite Tariff Retention
Coinciding with tariff news, the UK government concluded a new bilateral trade agreement with the United States. While it falls short of the full Free Trade Agreement once envisioned, it marks a step forward in market access.
Key features include:
- No change to the 10% base tariff on some goods, including aluminium and selected machinery.
- Expanded access for UK agricultural products such as cheese, lamb, and processed foods, which had faced restrictive U.S. health and safety standards.
- Tariff relief on British cars and car parts, offering breathing space to UK manufacturers previously squeezed by the post-Brexit EU rules of origin.
- Digital economy enhancements that simplify e-commerce, fintech operations, and data transfer for service-based exporters.
For UK SMEs, this agreement means slightly lower entry barriers and clearer regulatory pathways when entering or scaling up in the U.S. market. Though it doesn’t overhaul the trade landscape, the deal lays groundwork for future expansion.
For large-scale exporters, this agreement signals political goodwill and may prelude more ambitious agreements post-U.S. elections. As UK-U.S. regulatory standards start aligning in certain sectors, compliance costs could gradually fall.
While some critics say the deal lacks depth, businesses would do well to focus on the specific new routes to market it enables, especially for food, drink, and autos.
UK Border Infrastructure Rollback: Government May Sell Sevington Checkpoint
In a policy pivot reflecting evolving UK-EU trade norms, the UK government revealed this week that it is considering the sale of the Sevington border facility in Kent. Built in 2021 to manage post-Brexit goods checks, the facility has seen diminished use following recent trade simplification efforts.
This news follows a wider easing of EU-UK trade tensions. Health certifications and phytosanitary checks on many plant and animal-based products have been phased out or significantly relaxed, especially for goods traded in bulk or under long-term contracts.
The implications for importers and exporters are substantial:
- Lower costs: Many food importers have spent thousands annually on veterinary inspections and border delay charges. The rollback could eliminate these.
- Faster logistics: Fewer physical inspections mean reduced lorry queues, faster customs clearances, and more predictable delivery timelines.
- Sign of longer-term normalization: The government’s willingness to offload expensive infrastructure indicates confidence in a less combative future EU relationship.
This development allows UK businesses, particularly in food, agriculture, and horticulture, to recalibrate supply chains, possibly favouring EU suppliers again due to reduced compliance hurdles.
Sevington’s potential sale may also trigger a reassessment of other border infrastructure, offering further opportunities to streamline freight flows and reduce import costs across sectors.
UK Business Confidence Slumps to Two-Year Low Amid Trade Concerns
The latest quarterly index from the Institute of Chartered Accountants in England and Wales (ICAEW) shows that UK business confidence has hit its lowest level since early 2023. The confidence index now sits at -3, falling from 0.2 in the previous quarter.
Several macroeconomic factors are dragging sentiment down, including:
- Rising corporate taxes
- Persistent wage inflation
- Diminishing consumer spending power
However, trade uncertainty emerged as one of the most frequently cited concerns, particularly among mid-sized importers and exporters. Specific worries include:
- Tariff unpredictability stemming from recent U.S.-EU and UK-U.S. trade news.
- Currency volatility, especially GBP fluctuations against the USD and EUR, affecting margin forecasts.
- Compliance costs tied to changing customs rules, carbon border taxes, and ESG reporting standards in major export destinations.
For UK exporters in manufacturing and tech, weaker demand from Asia and parts of the EU is also weighing heavily on forward orders.
Importers face their own challenges. Energy price instability and shipping container availability continue to affect freight rates and planning.
In sum, the ICAEW index suggests that businesses are cautious, potentially delaying investment decisions or expansion plans. For those in international trade, scenario planning and currency hedging strategies may be more vital than ever.
