Tariffs and Trade Deals: What’s Next for the UK Economy?
As the UK continues to navigate a complex post-Brexit global economy, tariffs and international trade agreements are back in the spotlight. While domestic tax policy tends to dominate headlines, the real impact on businesses often lies in the details of international trade rules, customs charges, and supply chain disruption.
In 2025, the UK is facing both challenges and opportunities as it strikes new trade deals and adapts to evolving global dynamics. For businesses that import, export, or rely on overseas markets — especially SMEs — understanding how tariffs are changing, and where trade deals offer relief, is essential for strategic planning.
🌍 The Global Trade Environment: Still Uncertain
The global trade landscape has been anything but stable in recent years. Since the UK’s departure from the EU, businesses have faced new frictions in cross-border trading, including:
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Increased paperwork and customs checks.
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Tariff reintroduction in some sectors.
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Disruption to just-in-time supply chains.
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Shifting demand due to economic pressures and inflation.
In addition, US tariff policies, supply shortages, and global political tensions have added further volatility, particularly in sectors such as:
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Automotive and engineering
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Manufacturing and construction
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IT equipment and electronics
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Pharmaceuticals and chemicals
Even businesses that trade only within the UK are indirectly affected, as tariffs and trade rules impact the cost of imported goods, logistics, and raw materials — all of which feed into inflation and supply chain delays.
🤝 Progress on Trade Deals: Signs of Hope
Amid the uncertainty, there has been some encouraging progress on new trade agreements. The UK Government has recently confirmed advancements on several bilateral and multilateral deals, with the EU, United States, and India being the most prominent.
These deals aim to reduce tariffs, simplify regulatory processes, and create new opportunities for UK-based firms to export their products and services competitively.
🇪🇺 UK-EU Trade Relations
While a full reversal of Brexit is off the table, recent negotiations have led to technical adjustments that reduce some of the friction UK businesses have experienced when trading with the EU.
Key developments include:
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Streamlining rules of origin requirements, allowing goods with mixed supply chains to qualify for preferential tariffs.
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Introducing “trusted trader” schemes to reduce customs delays at EU ports.
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Cooperation on digital documentation to speed up exports.
These steps don’t eliminate the barriers created by Brexit, but they do help mitigate some of the burdens placed on SMEs — especially manufacturers, food producers, and retailers relying on European suppliers or customers.
🇺🇸 UK-US Trade Talks
Talks between the UK and the United States have been gradual and complex, but there has been steady progress on sector-specific arrangements. While a full UK-US Free Trade Agreement (FTA) is still pending, the following has already emerged:
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Enhanced access for UK digital services and tech providers.
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Reduced barriers for certain pharmaceuticals, legal services, and creative industries.
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Targeted cooperation in green technology and energy transition sectors.
Many UK businesses already operate in the US market, and these emerging arrangements are designed to cut red tape and lower compliance costs, even in the absence of a formal FTA.
🇮🇳 UK-India Trade Agreement: A Game Changer?
Perhaps the most significant upcoming development is the UK-India trade deal, which is reportedly nearing completion. This deal is expected to cover:
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Reduced tariffs on UK exports to India — including Scotch whisky, cars, and high-end consumer goods.
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Greater market access for UK-based service providers (legal, financial, consultancy).
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Looser restrictions on the mobility of skilled workers, potentially easing visa barriers for short-term projects.
India is one of the fastest-growing economies in the world and is set to be a key trade partner for the UK in the coming decades. For UK firms looking to diversify away from EU reliance or access new emerging markets, this deal could unlock substantial opportunities.
💼 What Do These Trade Deals Mean for Businesses?
The benefits of these trade deals are real — but they are not automatic. Businesses need to take proactive steps to access tariff reductions, stay compliant, and maximise their competitive edge.
1. Reduced Tariffs
Lower or zero tariffs mean goods and services can be exported more affordably. However, to qualify, businesses must:
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Understand and meet rules of origin requirements.
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Ensure documentation is accurate and submitted on time.
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Register for any applicable authorised exporter status or trusted trader schemes.
2. Improved Market Access
Service-based businesses may benefit from:
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Simplified visa and mobility rules (especially under the India deal).
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Mutual recognition of qualifications and licenses.
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Opportunities to bid on overseas contracts or enter joint ventures.
3. Supply Chain Flexibility
New agreements can open up alternative supply chains, helping businesses diversify away from high-cost or high-risk regions. This can support resilience and pricing stability — essential in the current economic climate.
⚠️ Challenges and Considerations
Despite the positive developments, businesses should remain cautious:
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Implementation timelines vary — some deals take years to come into full effect.
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Tariff reductions often come with complex compliance requirements.
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Political instability, particularly in election years, can reverse or delay progress.
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Trade agreements do not cover VAT or other indirect taxes, which must still be accounted for separately.
It’s also worth noting that not all sectors benefit equally. For example, agricultural and food producers may face quotas or phased access periods, while digital services may still be affected by data regulations or local market protections.
🔍 What You Should Do Now
If your business imports, exports, or provides cross-border services, Merranti recommends taking the following steps:
✅ 1. Review Your Supply Chains
Identify areas where tariff savings could be made under new trade deals. This may involve switching suppliers or adjusting logistics routes to align with preferential trading partners.
✅ 2. Understand the Rules of Origin
Work with your accountant or trade adviser to ensure that your goods meet the correct origin criteria to benefit from reduced tariffs.
✅ 3. Prepare for India Opportunities
If the UK-India deal comes into force as expected, now is the time to explore partnerships, assess your service offerings, and evaluate potential market entry strategies.
✅ 4. Check for Trade Scheme Eligibility
Register for customs reliefs such as:
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Authorised Economic Operator (AEO) status
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Simplified Customs Procedures
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Duty deferral or temporary storage schemes
✅ 5. Stay Updated
Ensure someone in your team is monitoring trade updates via gov.uk, HMRC bulletins, or your Merranti advisor. Rules and opportunities can change quickly.
🧾 Final Thoughts
Tariffs and trade deals don’t always make headlines — but they do directly impact your bottom line. Whether you’re importing raw materials or expanding into new international markets, staying informed and compliant is critical.
At Merranti Accounting, we help clients:
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Navigate customs and VAT rules
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Access new opportunities under trade deals
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Remain compliant with UK and international regulations
📨 Want to learn more about how trade agreements affect your business?
