The results of the U.S. presidential election, combined with the introduction of several European Union (EU) trade regulations, are poised to significantly alter the global trade landscape in 2024 and beyond. These changes will bring opportunities and challenges for businesses worldwide, particularly those in the UK.
U.S. Election: A Trade Policy Shift?
The outcome of the U.S. election will influence trade priorities for the world’s largest economy. As Trump takes office, it is highly likely its Republican administration will adopt a more protectionist stance, potentially reintroducing tariffs and renegotiating agreements. Experts think Trump Administration may either considering a universal US tariff – meaning imposing import duties between 10 or 20% on all imports – which in will be less detrimental as if they decide to go imposing different tariffs for imports coming from different countries.
However, any tariff impositions could lead to other countries or blocs as the EU responding with similar measures. Either scenario will require UK businesses to carefully monitor U.S. policy shifts and recalibrate strategies for exports, particularly in key sectors like aerospace, automotive, and pharmaceuticals.
The other issue for British companies to consider is the US-China Relations and if you are currently manufacturing goods in China which are then shipped to the US, then you need to consider how tariffs on Chinese origin goods may impact your business’ revenue and profitability.
Is there a UK-US Trade Agreement in the horizon?
Trade agreements on normal circumstances take years to come to fruition and these sometimes come faster when two countries or more wish for improving market access conditions. However, if the Trump administration leans towards protectionist measures and imposing trade restrictions, it will be fair to say the chances for an FTA will fade in the immediate future. However, we can expect more MOUs being signed between the UK with different states and whilst these are not really trade agreements, it may help efforts on trying to negotiate one in the longer term.
And what about New EU Trade Regulations?
UK Traders must keep track of several EU measures which are impacting exports from the UK into the bloc and ensure they are preparing now to be ready. Some of the below have already started but may see their ‘scope’ to widen up in the coming years too, and some other changes are expected to take place in 2025.
Carbon Border Adjustment Mechanism (CBAM): Designed to prevent carbon leakage, CBAM imposes a levy on imports based on their embedded carbon emissions. Energy-intensive UK exporters in sectors such as steel, cement, and aluminium must now account for higher compliance costs and align production with EU climate standards. The UK has also announced they will be introducing a UK CBAM in 2027 – which we expect will be very much in line with the EU one, but this without a doubt will place more red tap burden on businesses, and specially SMEs.
Import Control System 2 (ICS2): ICS2 enhances customs security by requiring detailed data submissions for goods entering the EU. For UK businesses, this means investing in updated logistical processes to avoid delays and ensure smooth trade flows.
VAT E-commerce Reforms: The EU’s VAT reforms introduce stricter reporting requirements for cross-border online sellers. This will particularly affect SMEs, necessitating greater administrative effort and potentially raising costs for UK businesses targeting EU consumers.
EU’s Deforestation (EUDR): This new regulation aims at combating deforestation linked to supply chains. Whilst EUDR was due to come into force in 2024, global partners called for an extension, and the EU has agreed to postpone allowing 3rd countries and member states, operators and traders to prepare in their due diligence obligations. Large businesses will have till the end of 2025, whilst Micro and SMES will have till Jun 2026.
Additional EU Regulatory Measures: New packaging waste directives and digital trade standards are also in the pipeline, pushing businesses to embrace sustainability and modernize operations.
UK upcoming changes
Safety and Security declarations for goods imported from the EU: Whilst this has been delayed, from the 31st Jan, UK traders will be required to submit safety and security declarations on goods being imported from the EU into the UK.
Windsor Framework implementation: Despite some delays, 2025 will continue to see the implementation of new schemes and regulations.
Implications for the UK Traders
A recent survey by the British Chambers of Commerce, which took place earlier in July and August with over 1300 respondents revealed that UK traders continue to face hurdles when exporting, with over 45% of the companies reporting ‘customs procedures and documentation’ being a top barrier, and 40% indicating that geo-political events impacted their business over the last year. The survey also shows awareness on incoming changes, as the ones mentioned above – specially on new EU regulations, is low amongst firms who are actively trading globally. For instance, 52% of firms reported no knowledge of security and safety declarations needed for imports from the EU, which was originally due to be in force at the end of this year.
So whilst the changes mentioned above present some challenges, it will also bring opportunities for UK traders. Compliance costs could rise, particularly in carbon-intensive industries. However, aligning with EU standards offers access to the bloc’s lucrative markets. Additionally, businesses may find opportunities in green technologies, sustainable supply chains, and emerging U.S.-EU trade synergies. To navigate these shifts, UK businesses must adopt a proactive approach, leveraging trade advisors, investing in compliance technology, and diversifying markets. By staying ahead of regulatory changes and adapting to geopolitical trends, the UK can maintain resilience and competitiveness in a rapidly evolving global trade environment.
How to prepare for upcoming changes and understand shifts in global trade?
Make sure to tap into the right business advice and start preparations now. Don’t leave it to the last minute to implement robust processes and systems to enable you to remain compliant. The Chamber can help you via our Compliance services
Up-skill your staff! The new EU regulations required your staff to have a good understanding of what will be required in terms for information, monitoring and reporting – specially for CBAM. Your EU customers will expect you to be able to support them with their reporting requirements. The Chamber offers a wide range of courses that can help you with that and we also offer bespoke solutions.
Attend our upcoming Trade Forum which will be covering upcoming EU and UK regulatory changes. Book on the link below!
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