UK Speeds Up Free Trade Agreements As USA Goes for More Tariffs

15th July 2025

he UK has been actively accelerating its free trade agenda—especially in contrast to the U.S., which has leaned heavily into tariffs under its current administration. President Trump has announced that on 1 August 2025 he will impose more tariffs on several countries.

UK's Trade Strategy Highlights

The UK now has 39 trade agreements in force with 73 partners, including major deals with Australia, New Zealand, Japan, and the CPTPP bloc.

Negotiations are ongoing with India, Turkey, South Korea, Switzerland, and the Gulf Cooperation Council, among others2.

The India-UK Free Trade Agreement, finalized in May 2025, is particularly ambitious—projected to boost UK GDP by £4.8 billion annually and double bilateral trade to $100 billion by 2030.

Meanwhile in the U.S.

The U.S. has imposed a blanket 10% tariff on most UK goods, with higher rates (up to 25%) on steel and autos6.

Although a UK-US trade deal was signed in May 2025, it's narrowly focused—mainly benefiting the automotive and aerospace sectors8.

Broader tariff reductions remain elusive, and the U.S. is still pursuing aggressive trade protectionism, especially under the "reciprocal tariffs" policy.

Bottom Line The UK is clearly positioning itself as a nimble, globally engaged trading nation post-Brexit. While the U.S. tightens its borders with tariffs, the UK is opening doors—especially in Asia and the Indo-Pacific. It's a strategic divergence that could reshape trade alliances in the coming years.

How does the UK's trade strategy affect relationships with the EU?[/b

The UK's evolving trade strategy is reshaping its relationship with the EU in both promising and challenging ways:

Areas of Cooperation
2025 UK-EU Trade Agreement introduced streamlined customs procedures, mutual recognition of professional qualifications, and reduced checks on animal and plant products—all aimed at easing post-Brexit trade frictions.

The UK and EU now share carbon emissions trading systems, exempting UK firms from the EU's carbon border tax and saving British businesses around £800 million.

A sanitary and phytosanitary (SPS) agreement has reduced red tape for food exports, improving supply chain efficiency.

Points of Tension
The EU recently rejected the UK's bid to join the Pan-Euro-Mediterranean (PEM) Convention, which would have simplified rules of origin and boosted UK supply chain flexibility3.

Brussels fears UK goods could gain unfair low-tariff access to the EU market if PEM rules were adopted, and is reluctant to reopen the existing Trade and Cooperation Agreement.

Despite a political "reset" in May 2025, technical and political hesitations persist, especially around deeper integration without rejoining the single market or customs union.

Strategic Implications
The UK is pursuing more agile, sector-specific trade deals globally, which may reduce its reliance on EU markets over time.

However, EU cooperation remains vital, especially for industries like manufacturing, agriculture, and services that depend on integrated European supply chains.

The UK has several promising avenues for deepening trade ties with the EU, even without rejoining the single market or customs union. Here are some of the most likely and strategic options:

Pan-Euro-Mediterranean (PEM) Convention
Goal: Simplify rules of origin and allow UK manufacturers to count inputs from other PEM members as local content.

Status: The EU rejected the UK's bid in July 2025, citing concerns over unfair low-tariff access2.

Future Potential: If political tensions ease, the UK could revisit accession, especially with industry support from groups like the British Chambers of Commerce.

Mutual Recognition Agreements (MRAs)
Sector Focus: Professional services, pharmaceuticals, and business events.

Current Campaigns: The UK's Events Industry Alliance is pushing for an MRA to reduce red tape for exhibitions and conferences.

Benefits: Easier cross-border operations, reduced costs, and restored UK competitiveness in EU markets.

Expanded Sanitary and Phytosanitary (SPS) Agreements
Existing Deal: The 2025 UK-EU trade agreement already introduced a permanent SPS zone, easing food and agricultural trade.

Next Steps: Further alignment could include joint inspections, digital certification, and broader coverage of processed foods.

Youth Mobility and Visa-Free Work Schemes
Framework Agreed: A preliminary youth mobility scheme is in development6.

Future Scope: Could expand to include short-term work visas for creatives, researchers, and seasonal workers.

Digital Trade and Customs Simplification
Proposals: Streamlined digital documentation, expanded trusted trader schemes, and mutual recognition of conformity assessments.

Impact: Lower costs, faster border crossings, and reduced friction for SMEs.

Defense and Industrial Cooperation
New Partnership: The UK-EU Security & Defence Partnership opens doors to joint procurement and access to the EU’s €150 billion SAFE fund7.

Trade Angle: Could lead to preferential treatment for UK defence exports and shared innovation platforms.

[b]Has Canada and UK announced any trade deals
Canada and the UK haven’t announced a new bilateral free trade agreement recently—but there’s a lot going on behind the scenes:

Current Status
The UK-Canada Trade Continuity Agreement (TCA), based on the old EU–Canada CETA deal, remains in force indefinitely2.

It allows tariff-free trade on most goods, but rules of origin and cheese quotas have become sticking points4.

Stalled Negotiations
Talks for a bespoke UK–Canada Free Trade Agreement broke down in early 2024 due to disputes over:

Access to Canada’s cheese market

Automotive rules of origin

Food safety standards for beef and pork

CPTPP Developments
Canada has agreed to ratify the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Once ratified, UK exporters will gain tariff-free access to Canada under CPTPP terms—potentially bypassing some of the issues in the stalled bilateral talks.

What’s Next?
A joint UK–Canada taskforce was announced in June 2025 to revive trade talks and explore cooperation in AI, tech, and defence.

However, a full free trade agreement may not materialize until after upcoming elections in both countries.