Insight
02/07/2025
The UK government has launched its new Trade Strategy, positioning the UK to become the “most connected nation in the world.” The strategy links trade policy to key domestic objectives, including the transition to net zero, the development of critical technologies, and the growth of high-value sectors such as advanced manufacturing, clean energy, life sciences and digital services. The government plans to use trade policy as a lever to support these industries, by opening up overseas markets for exports and by ensuring that the UK remains an attractive destination for international capital and supply chains.
Improving the Mechanics of Trade
The strategy places significant weight on improving the mechanics of trade. The government is planning a comprehensive programme of customs modernisation and trade facilitation reforms, aiming to make the UK’s borders among the most efficient in the world. This includes investment in digital infrastructure, the development of a Single Trade Window to streamline interactions with border agencies, and enhancements to trusted trader schemes. The aim is to reduce friction, lower compliance costs, and improve the speed and predictability of cross-border trade, particularly for small and medium-sized enterprises that may currently find customs procedures complex and time consuming.
Recognising that tariff reductions through FTAs alone do not guarantee and increase in trade flows, the strategy outlines a stronger focus on market access work. With the government committing to identifying barriers in priority markets and resolving them in partnership with business. This will include tackling non-tariff barriers, such as regulatory divergences, burdensome technical requirements and inconsistent enforcement practices in overseas markets. The Department for Business and Trade will refocus its overseas network and expand market intelligence capabilities to better target these efforts.
The government also intends to increase the visibility and effectiveness of its trade support services. This includes refining the UK Export Finance (UKEF) offer, expanding digital export tools, and rolling out initiatives designed to support first-time exporters and businesses looking to expand into new markets. The strategy recognises the role of services trade and commits to providing certainty and stability for key sectors including finance, legal services, education and digital. While few new market access concessions are promised in the short term, the government has reiterated its support for removing behind-the-border restrictions and securing better recognition of UK professional qualifications abroad.
The Future of Free Trade Agreements
The government will continue to build on the network of trade agreements it has secured since leaving the European Union, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and bilateral deals with Australia and New Zealand. At the same time, it will look to modernise and deepen its continuity agreements—those that were rolled over from the UK’s time in the EU—to reflect UK-specific interests and remove technical barriers that hinder UK exporters. However, comprehensive trade deals are complex and take a long time to negotiate, and in future the UK is likely to expand its market access by targeting more nimble sector specific arrangements as described above.
Security and Resilience
The trade strategy has security at its core, explicitly linking open trade with the need to protect national interests. This reflects growing concerns about geopolitical instability, with the government highlighting the importance of building resilience into supply chains and protecting sensitive sectors from hostile actors. New measures include a strengthened investment screening regime, expanded use of trade remedies to protect strategic industries and closer alignment with trusted partners to reduce exposure to risk.
Supply chain resilience is given particular emphasis as a strategic priority. The strategy highlights the vulnerability of key inputs such as critical minerals, semiconductors and medical products, and sets out plans to secure long-term access through diversification of sourcing, targeted support for domestic capabilities and deeper cooperation with allies. A new public consultation will determine the future shape of the UK’s steel import safeguards, reflecting the sector’s strategic importance and the need for long-term stability.
The strategy will also facilitate the creation of the newly established Supply Chains Centre and a new Economic Security Advisory Service, both designed to work in partnership with the private sector for more secure supply chains.
Regional Delivery
The role of regional and sectoral delivery is another important feature. The government plans to work more closely with devolved administrations, local business groups and trade envoys to ensure that the benefits of trade are distributed more evenly across the UK. There is an explicit focus on levelling up the regions through trade, with tailored support for exporters outside London and the Southeast and greater alignment between trade promotion and the government’s place-based growth agenda.
What Else is New?
To support businesses in adapting to the changing trade landscape, the government has launched the Ricardo Strategic Trade Advisory Fund. The fund is intended to help UK businesses navigate global market volatility, particularly in strategically sensitive sectors, by giving them access to tailored legal and technical advice on trade policy. It also provides resource for more detailed economic analysis to inform future trade defence actions.
The UK government is considering joining the Pan-Euro-Mediterranean (PEM) rules of origin convention. The PEM is not a customs union, but does standardise rules of origin among its members, which could streamline customs processes for UK businesses in pan-European supply chains. A consultation with UK industries, especially the eight priority sectors identified in the recent industrial strategy, will now take place to assess the overall benefits for businesses.
The government also stated its intent to accede to the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) highlighting its commitment to a robust, rules-based global trading system by providing a temporary mechanism for resolving WTO trade dispute appeals.
What does this mean for businesses?
For businesses, this strategy provides a clearer framework within which to plan. While not radically shifting the UK’s trade policy model, it does mark a sharpening of focus around core economic goals: supporting high-growth sectors, simplifying trade processes and using trade to enhance national resilience. For businesses operating in export-facing industries, or those reliant on complex supply chains, the emphasis on digital customs systems, targeted market access and regulatory cooperation may translate into commercial gains.
Business engagement will be key to the success of the strategy. The government has committed to greater transparency and consultation and will rely on detailed input from businesses to shape negotiations, identify barriers and target support. As a result, businesses should be considering how best to engage with the Department for Business and Trade, and how to align their international strategy with the evolving trade framework.
The publication of this Trade Strategy should prompt businesses to reflect on how they are positioned to benefit from upcoming changes. This includes considering exposure to future trade disputes, assessing readiness for digital customs systems, identifying product-specific or market-specific trade barriers, and taking full advantage of government export support. Businesses that are proactive in adapting to these changes and engaging with policy developments are likely to be best placed to benefit. For those looking to navigate the detail or explore how the strategy applies to their operations, Deloitte’s trade and customs specialists are on hand to help.