The UK government has unveiled a new trade strategy aimed at bolstering exports and safeguarding domestic businesses from the threat of cheap imports, particularly in the wake of new US tariffs. This comprehensive plan seeks to remove barriers for British firms selling abroad while strengthening trade defences to prevent foreign goods from undercutting local industries.
Government Unveils New Trade Strategy to Protect UK Firms
The government’s new trade strategy is designed to navigate a complex global economic landscape, offering both offensive and defensive measures. The initiative comes as sectors like steel and automotive express concerns that goods originally intended for US markets might be diverted to the UK due to increased American tariffs.
Business Secretary Jonathan Reynolds affirmed that the plan would "ensure British businesses are protected from harm." The strategy is being discussed at the annual British Chambers of Commerce (BCC) conference in London, where economic growth is a key focus.
Key Takeaways
- Increased Export Backing: UK Export Finance, the government’s export credit agency, will see its capacity boosted by £20 billion, rising from £60 billion to £80 billion, to provide greater financial support for exporters.
- Enhanced Trade Defence: The strategy focuses on strengthening protections against cheap imports, particularly for vulnerable industries such as steel and cars. A call for evidence has been launched for steel producers as current safeguards are set to expire in 2026.
- Addressing US Tariffs: The plan aims to mitigate the impact of US import taxes, which have made it more expensive for other countries to sell goods in America. The UK has already secured a deal with the US on steel and car imports.
- Focus on Services Exports: The government is highlighting an increased emphasis on boosting the UK’s services exports, pointing to recent successes like the free trade agreement with India.
- Concerns Over Bioethanol: A deal with the US to remove a 19% tariff on US bioethanol imports has raised concerns about the potential collapse of the UK’s domestic bioethanol industry.
Industry Reactions and Political Commentary
The trade strategy has elicited mixed reactions. Andrew Opie of the British Retail Consortium (BRC) welcomed trade deals but called for swift action on the "de minimis" rule, which allows low-value packages to enter the UK tax-free, arguing it gives overseas firms an unfair advantage.
The Liberal Democrats criticised the strategy, with Deputy Leader Daisy Cooper suggesting a deeper relationship with the EU through a customs union would be a more effective defence. However, Prime Minister Sir Keir Starmer defended the government’s approach, stating that trade deals with the US, India, and the EU have "restored our identity" on the world stage.
Conversely, Conservative shadow business secretary Andrew Griffith expressed scepticism, stating, "It’s actions, not words, that count," and questioned the progress of various trade agreements.
