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The UK has released its 2025 trade strategy

It’s a sign of the times that we can genuinely say that the UK’s release of its trade strategy is the moment that many of us have been waiting for.

The 100-page strategy, published this week, outlines how the country plans to trade moving forward. The new strategy is built on the simple idea that the UK should stay connected to global markets, but it must be smarter and more careful in how it does this.

A changing world and the need to adapt

Since the end of the Second World War, global trade has largely followed a clear and structured pattern. Countries reduced trade barriers, joined international groups, and trusted rules set by large organisations like the World Trade Organization (WTO). Today, that system is under pressure. Some countries are raising new barriers while others are using trade as a tool in larger political struggles. Global supply chains are being bombarded (in some cases quite literally) with new shocks, disruptions, and technological changes.

But while the UK clearly sees these changes, its new strategy shows that it does not want to shut itself off but rather wants to adjust and act in a more strategic way. As the strategy says, “The building and maintenance of a strong economy … relies on us developing robust responses to all possible threats to prosperity.”

The government says: “We must also identify the many exceptional advantages that the UK enjoys – both diplomatic and industrial – and continue to exploit these to the full.”

At the same time, the strategy acknowledges that it cannot go back to old ways of thinking, saying, “Many old assumptions of trade policy will have to be dropped.”

The UK’s trade strengths and key sectors

The UK is starting from a strong position. It is the sixth-largest economy in the world, and trade is a major part of its national output. In 2024, total trade (imports and exports) made up about 60% of the country’s gross domestic product (GDP). The use of English as the world’s prominent Lingua Franca helps the UK in global trade, as does the wide use of English and Welsh law in international contracts. 

Notably, services trade (including areas like finance, law, consultancy, design, education, and digital services) has proven quite strong. In 2024, the UK exported £508 billion in services and imported £314 billion, giving it a strong surplus in the area. Under the new strategy, the government wants to help UK service firms, many of which are already global leaders, grow even more by opening new markets and removing unnecessary rules in other countries.

In contrast, the UK’s trade in goods has struggled, growing more slowly than that of other G7 countries since 2018. Goods trade remains important for the country, especially for regions like Wales, Northern Ireland, and Scotland, where manufacturing supports many jobs and contributes to exports. The UK has some strong sectors in goods, such as advanced manufacturing, clean energy technology, defence, and life sciences. These sectors are included in the Industrial Strategy and are seen as areas of future growth.

According to the strategy, “Particularly at the high-end, though, manufacturing is increasingly reliant on imported raw and intermediate inputs”. This means trade flows – both in and out – must be stable and reliable. To support this, the UK is building systems to monitor and respond to supply chain risks.

Building strong trade relationships

Under the new strategy, the UK is focusing on three main trading partners: the European Union, the United States, and China, each of which requires a very different approach.

The EU is the UK’s largest trade partner. In 2024, trade with the EU was worth £813 billion. Even after Brexit, EU countries are still vital to UK exports and imports, but trading with them has become more difficult. Many businesses, especially small ones, have stopped exporting to the continent due to new paperwork and costs. 

The government wants to make this easier, with the strategy announcing, “We are committed to strengthening UK-EU relations and making trade with our largest and most important partner easier.”

At a UK-EU summit in May 2025, the two sides agreed on new measures, including making it easier to export food, linking carbon markets, and improving recognition of professional qualifications. 

The UK signed a new economic deal with the US, the first nation to do so since President Trump returned to power for his second term. This agreement focuses on a few important sectors like cars, steel, and medicines. While not a full free trade agreement, it protects jobs and gives the UK a foundation for future talks. As the strategy explains, “the UK-US economic deal is a slightly different form of deal, the opening of a conversation rather than its conclusion”.

The two trans-Atlantic neighbours are also working together on technology, especially in artificial intelligence (AI), as both countries want to lead in this area and support businesses that create new digital tools.

The relationship with China is more complex. China is the UK’s fifth-largest trading partner, and trade with the Asian giant brings opportunities, especially in services and high-quality goods. However, there are also risks, including national security and unfair trading practices. The UK wants to grow trade with China where it makes sense, while staying cautious and protecting sensitive industries. “We are clear that our relationship with China is unique,” the strategy says. “There are many areas where we are happy to let trade flourish, but there are areas where we rightly need to exercise caution.”

The UK is also building new ties outside of these major partners, and the free trade agreement with India is one example. Once it begins, UK businesses will save up to £900 million per year from lower tariffs and easier customs rules. The strategy calls this deal “a major advantage our businesses will enjoy over their international competitors”.

The UK has also joined the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), a large trade group in the Asia-Pacific region. This gives UK companies better access to fast-growing economies like Vietnam, Malaysia, and Mexico. Joining this agreement, the strategy says, “provides a platform for a diverse group of major economies to come together and discuss how to deepen and extend the reach of high standards trade”.

Tools to support businesses and boost exports

On a practical note, the strategy includes new tools to help UK businesses succeed in global markets. One key change is an increase in export finance. UK Export Finance (UKEF), the nation’s export credit agency, will now have £80 billion to support deals, up from £60 billion, to help businesses get the money they need to produce goods and services for export.

The government is also creating a new “Ricardo Fund.” This fund will help regulators work with other countries to remove hidden trade barriers, such as different rules or unclear processes that make it harder to export. The government knows that many exporters find it hard to use official help. The strategy includes plans to improve online services and make it easier for companies to find clear advice. 

The UK is also moving toward more digital trade. It was the first G7 country to give electronic trade documents the same legal status as paper ones, “but even as other countries pass similar laws, the practical take-up of electronic trade paperwork by UK businesses remains too slow. We will work with international and business partners first to understand what is currently holding businesses back from digitalising their trade supply chains and focus on fixing those problems”.

The government also plans to implement a series of Digital Trade Corridors with European countries, which will allow faster movement of goods and reduce the need for physical paperwork.

Fair, secure, and sustainable trade

Another priority is responding to unfair trade practices by updating the trade defence system used to deal with issues like dumping (where foreign companies sell goods at unfairly low prices). A new Economic Security Advisory Service will monitor risks, such as shortages of key products or dangerous market behaviour.

“The UK needs to guard against economic threats that go beyond the traditional definitions of unfair trading practices, including the strategic weaponisation of trade,” the strategy reads. “We will create new powers to face these new threats, at the same time as engaging robustly in international forums in support of trade that is not just free but fair.”

It also links trade to broader goals like supporting the environment, protecting workers, and reducing poverty, and becoming a Clean Energy Superpower. Accordion to the strategy, “The UK is committed to playing its full part in addressing pressing threats to the world’s climate and biodiversity, as well as wider problems of pollution”.

A strategy for an uncertain future

The UK’s 2025 Trade Strategy does not aim to return to old models of trade. Instead, it looks at the world as it is—complex, digital, and unpredictable. The strategy is open to trade, but also prepared for risk.

Trade is no longer just about removing tariffs. It is about solving real problems, opening real markets, and using smart tools to support the economy. By offering a roadmap for how the UK will trade in a world that is moving quickly and often unpredictably, the UK’s new trade strategy reflects that thinking. 

“This is an ambitious trade strategy,” Secretary of State for Business and Trade Jonathan Reynolds and Minister of State for Trade Policy and Economic Security Douglas Alexander write in the strategy’s forward, “which is pragmatic in its approach to diplomacy, but also gritty and deeply practical about exactly how we move forward from here.”