From tariffs and sourcing to compliance and resilience, here’s what to know and what to do next.
For supply chain leaders and decision-makers, they unlock real opportunities: from reduced costs and shorter lead times to long-term levers like diversified sourcing and access to new services markets. But benefits won’t land automatically. Complexity remains, particularly around US–China tensions, EU rules, and real-world implementation. This article explores the current state of each agreement, what they mean for UK businesses, and how to turn shifting trade policy into actionable advantage.
UK–India Free Trade Agreement: Growth in a Key Emerging Market
Formally signed on 24 July (pending parliamentary ratification), the UK–India FTA is forecast to double bilateral trade to $120 billion by 2030 and boost UK GDP by nearly £5 billion a year (UK Government, 2025). India will reduce tariffs on more than 90% of UK exports, including Scotch whisky, automotive parts, and machinery. The deal also improves UK access to India’s fast-growing services sector, including legal, telecoms, and financial services.
UK–US Economic Prosperity Deal: Targeted Relief, Limited Scope
The UK–US Economic Prosperity Deal delivers targeted benefits but falls short of a full free trade agreement. Tariffs on UK car exports were cut from 27.5% to 10% (capped at 100,000 vehicles per year), and tariffs on UK steel and aluminium have been removed entirely, offering more immediate relief for those sectors. Talks continue in areas like pharmaceuticals and industrial goods. (UK Government)
A parallel US-EU trade understanding, reached on 27 July, eases uncertainty for UK manufacturers with EU-US supply chains, particularly in rules-of-origin-sensitive sectors. However, the broader landscape remains unpredictable. With the Trump administration favouring bilateral, transactional trade arrangements, businesses face a heightened risk of further changes, especially in regulated or politically sensitive sectors. For UK-EU-US trade, flexibility and tight compliance monitoring will be critical. (Politico)
The 1 August US announcement underlines this unpredictability. Even if the UK avoids direct impact, ripple effects are likely as exporters shift to UK or EU markets, altering demand, pricing, and competitive dynamics
UK–EU “Common Understanding”: Practical Steps to Reduce Friction
Announced in May 2025, this update builds on the existing Trade and Cooperation Agreement. It simplifies customs, aligns key regulations (especially for food and plant safety), and launches a shared emissions trading scheme.
These changes aim to reduce delays, paperwork, and costs at the EU border. Estimated to deliver up to £9 billion in economic benefit by 2040. (EU Commission)
Also Worth Watching: The CPTPP
The UK’s 2023 accession to the CPTPP strengthens access to Asia-Pacific markets, including Japan, Vietnam, and Canada. While less visible day to day, it adds resilience and options for globally integrated supply chains. For companies wanting to de-risk China exposure, CPTPP may prove increasingly valuable. (Gov.UK)
What This means for Supply Chains and Procurement
These agreements offer cost savings, supply flexibility, and improved access to global markets. But only if leaders act quickly and think strategically.
Immediate Actions for Supply Chain Leaders
- Revisit Sourcing Strategies: Tariff changes and simplified trade rules may shift supplier cost profiles beyond tier one. Reassess total landed costs and explore local or nearshore alternatives.
- Review Trade Compliance Frameworks: Ensure customs documentation, rules-of-origin checks, and regulatory updates are integrated across teams and systems.
- Increase End-to-End Supply Chain Visibility: New trade flows demand real-time data. Invest in tools to track sourcing, transit, and compliance. If visibility is weak, rethink sourcing before costs escalate.
- Strengthen Supplier and Market Negotiations: Use any tariff savings as leverage in supplier and customer discussions. But be mindful of caps and residual tariffs when modelling pricing or expansion scenarios.
- Plan for Talent and Market Entry: Improved services access and mobility agreements could support expansion plans in India or across EU markets. Plan ahead for skills, recruitment, and delivery models.
- Reassess Risk and Resilience: More supplier options and markets enable contingency planning. But if access narrows due to US tariff shifts, make sure you’re the supplier of choice, or risk being sidelined.
- Build Strategic Agility: Trade agreements offer benefits, but only if you stay prepared for knock-on effects from external shocks. Build flexibility into contracts, inventory, and logistics to adapt at pace.
Final Thoughts
New trade deals put the UK in a stronger position, but the job’s not done. Global supply chains are still volatile, and tariff shifts could force rapid change. Now’s the time to stay sharp. The wins are real: smoother EU access, new openings in India, and more options across the Asia-Pacific. But US–China tensions still cast a long shadow.
To stay ahead, businesses need to stay agile: tighten compliance, rethink sourcing, and build supply chains that can flex fast.
Need help translating trade opportunity into action?
We help businesses make sense of data-heavy, policy-driven change. From modelling tariff impacts to identifying hidden opportunities for cost reduction, growth, and supply chain efficiency, we lighten the load for in-house teams, bringing clarity and focus where it matters most. Email: info@fourcentric.com