The G7 brought trade progress for the UK with the signing of the US-UK Economic Prosperity Deal (EPD), the EU may also be readying to sign its own EU deal, and is digital trade actually more important than any single agreement?
The big picture: The G7 yielded several trade successes for the UK, with confirmation that Canada has ratified the UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as the signing of the US-UK EPD.
The EDP sign-off means that automotive manufacturers will see tariff reductions from 25% to 10% within a quota, with the government also touting a complete reduction in duties for the aerospace sector.
However, an anticipated reduction in tariffs on steel and aluminium has yet to materialise, with the Guardian reporting that the Trump administration’s concerns over the manufacture and origin of steel produced by Port Talbot’s Tata Steel have led to duties remaining at 25%.
Our trade expert Garima Srivastava reviewed the deal and offered insight into what this means for UK firms, and what they can do to take advantage of the deal.
Canada’s CPTPP ratification may well be more of a diplomatic than economic win, with the government estimating the pact will boost UK GDP by only “£2bn a year in the long run”.
Politico reports the G7 talks also yielded a new joint task force to work towards greater UK-Canada cooperation on technology and AI, as well as the possible reopening of free trade talks. However, a UK official told the publication that progress on trade is likely to be tentative, describing engagement on the FTA as “a staging post toward relaunch and whether we think it’s possible to get there within our red lines”.
UK-Canada talks ended acrimoniously in January 2024 under the previous Conservative UK government, with agri-products like beef and cheese a sore point.
Good week/bad week: The Chartered Institute of Export & International Trade will be supporting the Scottish government’s drive to boost trade, providing trade qualifications to learners in Sterling.
From autumn, we’ll be delivering Level 2 qualifications at Forth Valley College, Sterling, providing young learners with the skills they need to begin their trade careers.
The news comes ahead of the Chartered Institute’s in-person Scottish Member Forum, which will be held in Edinburgh on 3 July.
Not such good news for small businesses with regards to compliance this week, as the FT reports that small businesses failed to pay 40% of the corporation tax owed in the 2023-34 fiscal year, a shortfall of roughly £14.7bn.
While the ‘tax gap’ for large businesses has fallen in recent years, it has grown for smaller firms, with Tax Policy Associates founder Dan Neidle claiming that HMRC seems to have “lost control of the small company tax gap”.
The Federation of Small Businesses called for greater support for small businesses to navigate the tax system. At last week’s Spending Review HRMC announced it would provide £1.7bn in funds to provide 5,500 compliance staff and 2,400 debt management staff.
The week in customs: Traders will no longer need to worry about case sensitivity or removing diacritic characters (those with accents) from export licences.
The next Customs Declaration Service (CDS) update, CDS Release 4.8.0, will remove such sensitivity.
How’s stat: 4.25% – that’s the UK interest rate for the next couple of months, as the Bank of England has decided to hold the rate. Reasons include inflation remaining at 3.4%, above the 2% target, and concerns about an oil price hike as a result of the conflict between Israel and Iran.
Quote of the week: “That’s way bigger than all the deals put together, and I think we’ll see a lot more of that in the [Trade] Strategy.”
Secretary general of the International Chambers of Commerce UK Chris Southworth on the importance of digital trade to the UK’s Trade Strategy. He was speaking at last week’s GTR 2025 Conference. We have a member-exclusive write-up on his remarks and more about the strategy here.
What else we covered this week: We covered European Central Bank (ECB) president Christine Lagarde’s calls for greater inter-European trade to mitigate against the impact of increasing geopolitical uncertainty and supply chain fragmentation – read, tariffs.
We also looked at the bloc’s decision to pull out of talks with China ahead of the countries’ leader’s summit next month, while weighing up proposals for a US deal that mirrors the EPD.
Gearing up for next week’s E-commerce Week, designed to help businesses boost their online sales, there was a preview of the week’s events. This includes a webinar co-hosted by the Chartered Institute and Alibaba.com on overcoming barriers to online trade next Tuesday.
HMRC have advised traders they may be invited by Ipsos to participate in a new research project on border experiences. The department encouraged businesses to take part in order to “help HMRC shape customs policies and processes and improve the quality of support it provides”.
True facts: After US president Donald Trump raised security concerns about ownership of key UK industrial firms, he illustrated the kind of foreign buyout he’s comfortable with, as details of Japanese firm Nippon Steel’s takeover of US Steel emerged.
After 18 months of back and forth, and previous declarations from Trump that he would never support Nippon’s proposal, the US$14.9bn deal was confirmed.
Analysts have noted that the deal gives the US government an unusual amount of control over the firm, from veto power over key decisions like offshoring jobs, acquisitions and name changes, to presidential sign off.
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