The UK government is today trumpeting what it’s calling its fourth trade deal of the year – an updated agreement with South Korea.
However, the trade-dominated headlines are a mixed bag for Sir Keir Starmer’s administration this morning, with a tech deal with the US being suspended by the White House.
South Korea deal a ‘significant upgrade’
Trade minister Chris Bryant and Korean counterpart Yeo Han-koo have announced a “significant upgrade” to the UK-South Korea free trade agreement at Samsung KX in London today.
The deal “locks in tariff-free access across 98% of tariff lines”, the government has stated, with Bentley cars, Scottish salmon and Guinness among British goods expected to benefit. UK services firms are also being told they can expect a £400m boost in exports, including increased access to South Korea’s financial services market.
“This is a huge win for British business and working people and marks our fourth major agreement in 2025 after the EU, India and US,” said prime minister Starmer.
“Today’s agreement secures the UK as a global leader in digital trade and innovation while boosting our world class services sector, supporting iconic brands, and giving cast-iron protections to our key industries to speed up economic growth as part of our Plan for Change,” said Bryant.
UK exports to South Korea amounted to £8.1bn in the four quarters leading to the end of Q2 2025, according to a government factsheet. This was a 16.4% decrease compared to the previous equivalent period and the government will hope that the upgraded deal will regenerate positive momentum for British exporters. South Korea’s import market is expected to grow by 26% by 2035.
The deal updates rules of origin in a bid to “simplify tariff-free access” and “open doors for greater diversification across supply chains”, particularly in the automotive and pharmaceuticals sectors.
Hannah Gurga, director general for the Association of British Insurers, welcomed the deal for reducing barriers for services firms, including lifting requirements for data to be stored locally in South Korea.
However, the FT reports that the deal was less successful in removing barriers for legal services. Trade policy expert David Henig told the FT that the government was “wildly overselling” the deal and said it should now “focus on implementing and enhancing all of our trade relationships, backed up with regular reporting on progress”.
US tech deal suspended
In less positive trade news for the UK, the US has suspended billions of pounds of investment that it had promised as part of the ‘Tech Prosperity Deal’ earlier this year.
The £31bn package, announced when President Trump was in the UK for a second state visit in the autumn, included £22bn investment from Microsoft and £5bn from Google.
However, the Guardian reports that the Trump administration has suspended implementation of the agreement due to a “lack of progress from the UK in lowering trade barriers”. In particular, the UK’s continued implementation of a digital services tax and certain food safety rules have frustrated the White House.
The news comes at the same time that the president has filed a lawsuit of up to $10bn against the BBC over a controversial edit of a speech he made during the Capitol riots in 2021. While the British broadcaster has apologised for the edit, it disagrees with Trump’s legal team’s assertion that there is a “basis for a defamation claim”.
Ukraine peace talks progress
Adding to the complexity of UK-US relations are reports of progress in Ukraine peace talks.
A joint statement from the leaders of the ‘Coalition of the Willing’ – which includes Starmer, French president Emmanuel Macron and German chancellor Friedrich Merz – has welcomed “significant progress on President Trump’s efforts to secure a just and lasting peace in Ukraine”.
US and European leaders have agreed pledges towards “robust security guarantees” and “economic recovery support measures” for Ukraine. Trump has said that he thinks “we’re closer now than we have ever been”, following “numerous conversations” with Putin.
Export controls update
The government has published a ‘Notice to Exporters’ indicating that several Open General Export Licences (OGELs) have today been amended.
The updates reflect changes to control lists, with more goods falling under the scope of the Export Control Order and other relevant regulations.
OGELs have also been updated with a new condition that their reference number must be included in export declarations submitted into the Customs Declaration Service (CDS).
Also in the trade news today
- The government has announced that Nissan will begin production of its next generation LEAF electric car in Sunderland, in a £450m boost for the UK economy
- Ford, however, will take a $19.5bn hit by overhauling its electric vehicle production plans, including scrapping its flagship F-150 all-electric pick-up truck, the FT reports
- British tech minister Liz Kendall has today launched a new ‘Women in Tech’ taskforce in a bid to "break down the barriers that still hold too many people back", according to the BBC
Yesterday in trade
- The government implemented “contingency processes” amid a CDS service disruption. The system is now back to full functionality and business as usual processes. Visit gov.uk here for the latest on CDS availability
- Government also reminded users of the Customs Duty Waiver Scheme that they will need to “update the sector of your undertaking in the digital service before 31 December 2025” to avoid not being able to use the scheme from 1 January 2026
- Leader of the opposition, Kemi Badenoch, promoted pledges to abolish EV subsidies and to end the 2030 ban on new petrol and diesel cars
You can read all of yesterday’s trade news here.
