UK Trade Strategy
The businesses that succeed will be the ones that anticipate, adjust, and act to stay competitive.
What does the UK Trade Strategy mean for business?
For a generation raised on the principles of ‘free trade’ the last few years are disorientating. In the space of what seems like a few months, most of the assumptions governing post-war international trade have collapsed. The United States now imposes higher tariffs than at any time since the 1930s. Of course, none of this is quite as new as it feels. The problems with the world trade system go back well beyond Trump, or Brexit.
But the assumptions that have supported moves to ever freer trade since WWII no longer hold. Friends and foes alike are having to adjust.
The UK is among them. It was first to secure a deal with the US. But it’s a strange deal by historical standards: tariffs are higher than before – albeit lower than they would have been when President Trump initially announced. Looking east, Britain removed the regulatory barrier of EU sanitary and phytosanitary controls in 2024, four years after Brexit. In 2025, the government indicates it would like to re-impose them in the hope of creating a seamless EU-UK sanitary zone as part of a UK-EU reset.
The UK supports the old trade order, recognises it has failed, but has no clear solution. As one of the most open trading economies in the world, it wants free trade, advocates for low tariffs but is building a ‘trade defence toolkit’ to protect domestic markets.
Somewhere in there is a strategy.
The government has attempted to capture this in its UK Trade Strategy, published earlier this year (June 2025). This falls firmly into the statement-of-general-principles-that-doesn’t-upset-anyone category of government communications. It therefore falls a little short of the magnitude of the times.
Perhaps the strategy’s most useful function for business is to provide some useful way-markers of the troubles ahead and how the government might approach them.
But the big questions for companies are commercial and strategic. And immediate.
The situation for business
If the government is confused, the picture is no better for business boards. What are the tariffs on US imports today? What will they be in six months or six years?
How will other countries respond as the ripples spread? As tariffs on US goods will shut some products out of the US market, those impacted will simply find the next place willing to accept them. Will governments stand by as those surplus goods disrupt domestic markets? Or will they intervene themselves to protect their markets?
Most importantly for business: where in all this is the commercial advantage?
All regulatory regimes create opportunities. The ‘free trade’ regime that prevailed since WWII created one set. The emerging ‘tariff’ regime will create another. The businesses that succeed will be the ones that anticipate, adjust, and act to stay competitive.
There are multiple strategies they can pursue. This McKinsey report looks at how supply chains could rearrange as tariffs and export restrictions alter the terms of trade. More specifically, it suggests four ways in which firms might adjust: reducing imported components; replacing them with alternatives; ramping up domestic production; or, rearranging supply chains to avoid high tariffs.
These effects will ripple far beyond the US, making decisions in London, Geneva, Sydney or Rio equally susceptible to the gathering storm.
A new regime also brings new risks. Few businesses would have thought seriously about tariffs for much of the last 20 years: you might ignore a 4% duty bill in your planning; can you ignore a 10% or 20% one? Few will have thought seriously about product origin – i.e. where enough value is added to qualify products for free trade agreements. Few will have thought about trade compliance – how goods are classified, what governance is in place, what duties do they owe?
The jeopardy in these risks is rising by the day, as higher tariffs raise the stakes of non-compliance. They all end up on the desk of a CFO or Board Director.
What can business do?
Preparing a business for success in this world requires three things:
- Political understanding,
- Informed foresight, and
- Operational expertise in the realities of cross-border supply chains.
Political understanding identifies the pressures shaping trade policy. Some of the decisions needing to be made in response to these changing circumstances have lead times spanning years, if not decades. Moving factories or embedding new suppliers takes time. Business leaders will need political context to assess the stickiness of domestic policy or the trajectory of multinational trade arrangements on which their investments rest.
Tariffs on, for example, consumer electronics, are already shifting production from China to SE Asia. Witness Apple accelerating iPhone production in India. Expect something similar in the market for electric vehicle batteries. Poland is the world’s second largest producer. As the US raises tariffs on Chinese batteries, more of those will look for European markets. Polish batteries may face more competition at home but more opportunity in the US.
In the other direction, China recently blocked exports of rare earth magnets in response to US tariffs. Semiconductor technology has been subject to a similar tug-of-war since the last Trump presidency. Both of these commodities will remain at the heart of the struggle between the two giants, with implications for everyone else.
Understanding how your cross-border supply chain will operate in 5 or 10 years starts, therefore, with understanding how politics is evolving today.
Foresight implies a clear view of the range of scenarios that might play out. These should be based on facts – your data, your business strategy, a wide understanding of the potential implications of different trade challenges. Foresight can be difficult to obtain with so much uncertainty, but modelling the impact of tariffs and comparing potential trade scenarios reduces the guesswork in deciding a way forward.
Boards will become increasingly concerned with the resilience of their supply chains and their vulnerability to sudden shocks – rather than solely their time and cost efficiency. Being able to connect a trade shock – a tariff hike, for example, an export ban, or disruption to a shipping route – to impacts on your businesses allows firms to make balanced judgements in advance of problems and to exercise foresight in anticipating their impacts.
Firms will need a clear view of the horizon to anticipate the course of these developments and then to connect them to potential impacts. With a fragmenting international order, this requires an ever–wider field of view and deep expertise across a range of disciplines.
Foresight in identifying these vulnerabilities and the likelihood of them coming about is a valuable commodity in managing modern supply chains.
Expert knowledge is at the root of any confident and decisive response to these sorts of cross-border supply disruptions. As the range of trade deals and mutual recognition agreements grows, finding advantage within them requires expertise and experience. The advantages are clear.
Expert knowledge can reveal hidden opportunities to reduce costs, the risk of operational interruptions, or unexpected liabilities. These might lie in the options available for managing tariff risks – from contractual terms to processing reliefs to warehousing – to opportunities for ‘preferential’ duties under free trade agreements. Understanding the compliance requirements that sit beside each of these opportunities is a critical part of assessing your overall trade management options.
These options will inevitably involve a combination of political context, trade foresight and operational expertise. The intention should be to enable managers to exploit tariff advantages in free trade deals or identify alternative supply chain options that put a business ahead of its competitors.
What can government do?
Meanwhile the government will continue to grapple with a world it does not like and appears not fully to understand.
Through the Trade Strategy it identifies UK strengths in services, advanced manufacturing and clean energy. It has trade deals of real consequence (UK-India) and important symbolism (UK-US and EU-UK) and a host of less comprehensive deals and mutual recognition agreements. Even if it cannot describe an alternative to the crumbling order or rethink its own approach, it can reinforce these objectives.
Most notable in the context of this article is the prominence it gives to trade defence tools – tariffs, quotas, export controls and other ‘anti-dumping’ measures. These are likely to take on greater importance in coming years.
Investment in the woefully neglected border for UK goods is another promising sign, if delivered. That’s a big ‘if’, considering the history of border IT projects from CDS to the Single Trade Window and abandoned modernisation programmes. But the need is clear, as our four years of research into businesses’ experience of the border has shown (read our latest State of the Border 2024 report here).
If this strategy manages to bring the UK border for goods up to the standard of our border for people, it will have done a service. We may have to be content with it having laid some rather faint markers in the fog that is settling on international trade.
clearBorder is an independent team of experts helping clients with all of the challenges and opportunities highlighted in this article. We help organisations navigate trade and optimise cross-border supply chains. We prepare businesses for success by combining strategic insight and operational expertise for customers across the globe.
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