- The global trade landscape has seen a notable shift in recent years, recently driven by a heightened tariff environment and corresponding geopolitical realignments that have altered traditional patterns of market access, supply chains and policy cooperation.
- 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. 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.
- After rising tensions regarding export controls on rare earths, the US and China signed a temporary truce reducing tariff rates and suspending planned expansion of trade control regimes. Most provisions within the deal expire in November 2026.
- The volatility to global trade observed throughout 2025 has carried forward into 2026. Driven by persistent tariff uncertainty, stalled multilateral reform and continued geopolitical fragmentation, the policy landscape remains unpredictable and subject to frequent change.
- Timing: this is an area of continuing change impacted by many domestic and global developments.
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