- Global supply chains have been disrupted over recent years by severe fluctuations in supply and demand during the pandemic, the war in Ukraine, Houthi attacks in the Red Sea and, to an extent, post-Brexit issues in the UK. In recent months a higher global tariff environment is an increasing concern for businesses.
- In April 2025, the US administration announced a series of tariffs targeting individual trading partners and specific goods. Included within this were far-reaching “reciprocal tariffs”, with countries facing rates between 10% and 125%. The “reciprocal tariffs" were paused temporarily (initially to July 9, then to August 7) to allow time for intensive negotiations with affected countries. During this period, a 10% baseline tariff remained in place.
- Negotiations resulted in agreements with several key trading partners, including the UK, EU, Japan and South Korea. However, these agreements did not eliminate US tariffs on most goods. Conversely, countries such as Canada, Brazil and India did not reach an agreement and now face significantly higher tariffs than the baseline rate. A global baseline tariff of 10% applies to all countries unless otherwise specified.
- While some agreements have been finalised and tariffs are in force, negotiations are ongoing. Several countries including China and Mexico have been granted extensions to complete their negotiations. The final tariff landscape remains subject to further change as countries seek exemptions and additional agreements are reached.
- Global trade tensions with China persist and are increasingly shaping policy approaches, including the UK’s ‘Indo-Pacific tilt’, regulations on competition and subsidies, trade remedies and the implementation of National Security & Investment legislation. The government has committed to conduct a review of the UK-China relationship.
- Timing: this is an area of continuing change impacted by many domestic and global developments.
Resources (click to open)
