Businesses selling goods online to customers in the European Union face new import charges and changes to customs responsibilities under reforms being introduced in stages.
A temporary €3 customs duty began on 1 July 2026 for qualifying imports with a consignment value of up to €150. A separate handling fee is expected from 1 November, ahead of a wider move to a shared EU customs data system in 2028.
The measures affect sellers outside the EU, including UK businesses shipping directly to European consumers.
The European Commission says the changes are intended to tackle undervalued imports and unsafe products, improve customs checks and address unfair competition.
Mike Wilson, founder of Go Exporting, said: “This is the EU’s most extensive customs overhaul in decades and is designed to create a single, data-led customs environment, strengthen risk controls and make e-commerce operators more accountable for goods entering the EU.”
The €3 duty is based on customs classification rather than simply the number of parcels or physical products. Different product categories within one parcel can attract separate charges.
For example, the Commission says a parcel containing five T-shirts in the same tariff classification attracts €3 in duty. Three T-shirts and a watch attract €6 because they fall into two classifications.
The Commission’s updated October guidance specifies a €2 Union handling fee per customs item, expected from 1 November 2026. The delegated act setting the fee was still under scrutiny when that guidance was published.
The handling fee also covers qualifying distance-sale imports above €150. Under current systems, it applies per declaration line, rather than as a single charge for the whole parcel.
Product identifiers will also become mandatory from 1 November for relevant low-value distance-sale imports, helping customs authorities identify and trace goods.
| Date | What changes | What sellers should do |
|---|---|---|
| 1 July 2026 | Temporary €3 duty begins for qualifying imports up to €150. | Review basket-level duty, classification and margins. |
| 1 November 2026 | €2 handling fee expected per customs item; mandatory identifiers for relevant low-value imports. | Check fee implementation and product-data readiness. |
| 1 July 2028 | Data Hub mandatory for e-commerce; planned move to normal tariffs. | Prepare systems and responsibilities; model product-specific duties. |
| 1 March 2031 | Data Hub mandatory for importers for distance sales; planned transition to normal tariffs. | Assess the wider transition and integration requirements. |
| 1 March 2034 | Data Hub becomes mandatory for all traders. | Complete migration to the common customs system. |
The wider reform shifts customs responsibilities towards the sellers and platforms involved in the transaction, rather than the final consumer. Businesses will need to establish who supplies customs information, completes formalities and pays the relevant charges.
The EU Customs Data Hub will become mandatory for e-commerce from 1 July 2028. It is intended to provide a common system for submitting trade information and allow authorities to coordinate checks.
Normal customs tariffs are intended to replace the temporary €3 duty when the hub becomes operational. The temporary arrangement may be extended if necessary.
Businesses should now check the total cost of their EU orders, including duty, handling fees, VAT and delivery charges. They should confirm responsibilities with marketplaces and logistics providers, ensure product records are ready for the November requirements, and review pricing and customer terms. Sellers with significant EU volumes should also compare direct shipping with holding stock locally, including warehousing, returns and tax administration costs.
The most revealing question in international trade is increasingly not how close a market is, but how much you can rely on it.
Price, proximity and logistics still matter. Yet businesses making long-term decisions must also consider whether market access will survive a political disagreement, whether regulations will remain predictable, and whether a critical supplier could become a strategic vulnerability.
The deepening relationship between the EU and Canada brings those questions into focus. It suggests a future in which shared values carry greater commercial weight than geographical closeness – through compatible standards, trusted institutions and cooperation in industries that governments regard as essential.
Mike Wilson, founder of Go Exporting, said of the latest shift in global trade winds that: “Trade is no longer simply about geography; it is increasingly organised around politics and shared values – democratic governance, environmental commitment, data standards, and the rule of law.”
This shift has been brought into the spotlight by the dramatic change in the relationship between the US and Canada, and Mark Carney’s strategic shift towards creating tighter economic alignment between his nation and other, more ‘trusted’, markets.
This has so far culminated in the proposal of an ‘associate member’ status by European Commission President Ursula von der Leyen, suggesting that Canada could be the first such member.
And other like-minded, value-matched countries could follow suit.
Canada offers a compelling test. Its appeal combines energy and industrial resources with the prospect of a dependable long-term relationship. The EU and Canada have explicitly identified critical raw materials, energy, forestry, clean technology and defence procurement as priorities for economic cooperation.
And the opportunity isn’t just for Canada – it exists for the EU, too.
“Canada is one of the most underrated trade partners in the world. It is the world’s fourth-largest natural gas producer, holds the third-largest proven oil reserves globally, and sits on enormous reserves of the critical minerals – lithium, cobalt, nickel – that the green transition depends on.
“Beyond resources, Canada is a trustworthy, stable partner, a G7 nation and NATO ally.
“In a world where supply chain security matters as much as supply chain efficiency, that’s an important consideration.”
Industries where closer alignment could present opportunities
For exporters, the opportunity of closer alignment extends beyond selling more finished goods or offering more friction-free services. Closer cooperation could support partnerships in engineering, processing, maintenance, research and specialist services. A European business may find its strongest opening as a supplier to a Canadian project, or through a joint venture, rather than by approaching Canada solely as a new customer market.
Clean technology is another key industry where partnership opportunities are apparent. Europe’s expertise in wind, hydrogen and smart grids is a potential match for Canadian green ambitions.
Defence is another example of strong institutional alignment. In June 2026, the EU Council formally concluded the agreement enabling Canadian companies and products to participate in procurement under SAFE, the EU’s defence investment instrument. Canada became the first non-European country to participate.
That creates reasons for manufacturers and specialist suppliers to investigate, and invest in, partnerships across the Atlantic. It does not guarantee contracts: eligibility, technical requirements and a place in the relevant supply chain still have to be established.
Business loves certainty so it can plan and invest.
And in this current global climate, alignment on values, rather than historic ties and even legal agreements, seems to present the strongest chance of cooperation, alignment, and creating an environment for growth.
Closer alignment will increase competitive pressure
More choice for goods, services, supply routes, and ways of manufacturing, increases competition. For incumbents, this presents a challenge to their market position. For newcomers, an opportunity for growth. Overall, more competitive pricing and innovation.
For example, European timber producers should consider whether stronger Canadian relationships could bring more competition for construction and industrial customers.
And vice versa.
“The honest message for exposed sectors is to differentiate on quality, provenance, and brand now, before the competitive landscape shifts further,” continues Mike Wilson.
“My advice is simple: don’t wait for the agreement to feel real before you start moving.”
That means preparing for opportunities, rather than assuming future negotiations will deliver them. Export trade consultants like Go Exporting can help in this area.
A regional strategy matters too: “Doing business in Quebec is a materially different experience from Ontario or Alberta, and if you’re entering without a regional strategy, you’re not really entering Canada.”
The relationships require patience. In Mike’s experience, exporters can misread a measured approach to negotiations as a lack of interest. Choosing a market is only the beginning; understanding how potential partners assess risk and build confidence is part of the work.
Could this approach extend to Australia and the UK?
Australia is already strengthening its own European relationship. The EU and Australia concluded free trade agreement negotiations in March 2026 and have also signed a Security and Defence Partnership.
That doesn’t necessarily mean Australia will look to gain associate member status (something that is still to be defined and has no legal footing), but the mood music does suggest even closer ties in one form or another.
Another potential outcome is more of a network of overlapping partnerships: different countries participating in different combinations of trade, research, defence and regulatory cooperation. Its attraction would be greater resilience without requiring every partner to adopt the same institutional relationship, something that a post-Brexit Britain and nations with more isolationist politics may find more appealing as a safer middle ground.
What we must guard against, though, is values-based trade becoming shorthand for shutting everyone else out.
A ‘you’re not in our gang’ approach to global politics, trade, and cooperation.
Excessive fragmentation would raise costs and narrow opportunities, and deepen political rifts.
The challenge is to strengthen reliable partnerships while keeping trade open enough to support competition, innovation and growth.
The United States remains central to this calculation. In 2024, it received 75.9% of Canada’s merchandise exports, underlining the scale of the relationship that diversification must complement. Europe cannot simply replace that market. The strategic objective for Canada therefore is to build alternatives so that dependence on one partner does not become dependence on one government’s next decision.
For Britain, the lesson is to pursue practical cooperation while recognising that Canada offers no ready-made template. A UK-EU reset would have to address Britain’s own economic relationship, political choices and obligations.
For UK businesses, the longer-term future may nevertheless involve substantially closer European integration. Prime Minister Andy Burnham has signalled openness to considering a range of options, including full EU membership, reopening a conversation with potentially far-reaching commercial consequences… something a growing majority of the UK population (including business population) would welcome.
Businesses shouldn’t base investment decisions on an assumed outcome. But the firms best placed to benefit from closer integration will be those already earning trust, meeting the relevant standards and demonstrating what they can contribute.
The headline news globally since our last update has, of course, been the ongoing conflict in Iran and its wide-ranging ramifications.
From surging prices for oil and natural gas, the impact on fertiliser production and likely food prices, to even lesser-reported impacts such as lower conference turnouts around the world as Middle Eastern business communities are forced to alter their plans, there’s plenty for exporters to consider.
And there are other news items you may have missed, too. Let’s get you up to speed.
Impact of the Iran conflict on UK exporters
The escalation of conflict involving Iran is already feeding through into global markets, most visibly in energy pricing. Oil and gas markets have reacted quickly to uncertainty in the region, with price volatility increasing as supply risks are reassessed.
However, the impact extends well beyond energy. Fertiliser production, which relies heavily on natural gas, is likely to be affected, with further consequences for global agricultural output and food pricing. At the same time, disruptions to business travel and international events are beginning to emerge, particularly affecting companies with strong links to Middle Eastern markets.
There are also wider geopolitical implications. The UK government’s recent reluctance to align fully with US military action signals a continued shift toward closer strategic and economic alignment with Europe, particularly in trade positioning. This could have longer-term implications for how the UK balances its global relationships, especially between the US and EU.
What this means for UK exporters
For UK exporters, the immediate concern is cost volatility. Rising energy and input costs will feed directly into production and logistics, placing pressure on margins and pricing strategies.
More broadly, this is another reminder that geopolitical risk is not an abstract concept; it has direct operational and commercial consequences. Exporters should be reviewing supplier exposure, considering alternative sourcing where possible, and ensuring pricing models can absorb short-term shocks.
At a strategic level, the UK’s positioning between major global blocs continues to evolve. Exporters should monitor not only the conflict itself, but also how it influences trade relationships and regulatory alignment over the coming months.
Major changes to Scottish seafood exports in line with EU import rules
The UK government has announced significant changes affecting Scotland’s £1 billion seafood export industry, aimed at aligning more closely with EU import requirements. Full details can be found here:
https://www.gov.uk/government/news/major-changes-coming-for-the-1bn-scottish-seafood-exporting-industry
The changes are focused on improving traceability, certification processes and compliance with EU sanitary and phytosanitary standards. While these updates are sector-specific, they reflect a broader direction of travel in international trade regulation.
For seafood exporters, the changes will require adjustments to documentation processes, supply chain tracking and potentially operational systems. However, they are also designed to streamline access to EU markets, which remain a critical destination for UK food exports.
What this means for UK exporters
Although this announcement is focused on seafood, the underlying trend applies across multiple sectors. Regulators globally are increasing expectations around traceability, sustainability and compliance, particularly for goods entering large trading blocs such as the EU.
For UK exporters, this reinforces the importance of robust internal processes. Businesses that invest early in compliance, documentation and supply chain visibility will find it easier to adapt as new rules emerge.
Greater standardisation and alignment with EU requirements may reduce friction over time, making it easier for compliant UK exporters to compete effectively within European markets.
The future of exporting thought leadership looks bright…
AND FINALLY, something a little less gloomy.
Amid ongoing geopolitical and economic uncertainty, it is encouraging to see fresh perspectives emerging within the international trade space.
A recent article published in the Financial Times, written by a student, offers a thoughtful analysis of the current global trading environment and the challenges facing exporters today.
You can read the piece here:
https://www.ft.com/content/cbfd9e57-7957-4413-a5c4-4884554a6377
The article reflects a strong understanding of the complexities shaping modern trade, from geopolitical fragmentation to shifting supply chains, and highlights the importance of adaptability and strategic thinking for exporters.
Articles like this, and given current global trade upheaval, signify the importance of developing the next generation of international trade specialists – and how well adapted they may be to sailing through ever-strengthening trade headwinds.
And, with a headline like ‘Trade is now about strategic survival’, how wide-eyed that new generation is to the challenges ahead.
An expert word…
On the ongoing conflict in Iran
“In periods of geopolitical volatility, exporters who monitor global developments closely and adapt quickly – whether through seeking alternative markets, finding new suppliers, flexible pricing or regional distribution hubs – will be best positioned to protect their margins.”
On changes to Scottish seafood exports
“The changes for Scottish food exports highlight a broader trend in global trade where regulators are increasingly demanding greater transparency across supply chains. Exporters in any sector should expect similar traceability and sustainability requirements in the years ahead.”
Welcome to the very first Expert Exporter Monthly News Round-Up.
Each month, we’ll share the major developments shaping global trade, explain what they mean specifically for UK exporters, and include insight from Go Exporting founder and CEO, Mike Wilson, on the state of play for exporting firms.
Let’s dive in.
UK exporters react swiftly to US tariff threats
Research from the British Chambers of Commerce revealed that one in three UK exporters who expected to be affected by proposed US tariff measures at the start of the year had begun taking mitigating action immediately. You can read the full findings here:
https://www.britishchambers.org.uk/news/2026/01/impact-of-us-tariff-threat-revealed/
The proposed 10% tariff threat – linked to wider geopolitical tensions – may have been rolled back on by Trump after collective pushback from EU and UK politicians, but the reaction from UK businesses tells us something important. Exporters are no longer waiting for formal policy announcements before adjusting pricing models, reviewing supply chains or reassessing market exposure. Instead, firms are acting pre-emptively, assuming disruption is more likely than stability.
While this agility demonstrates improved resilience compared to previous trade shocks, it also highlights a deeper concern. Businesses are diverting management time and capital toward defensive planning rather than expansion. Long-term investment decisions, including entering new markets or scaling overseas operations, are becoming harder to commit to in an unpredictable policy environment.
What this means for UK exporters
The lesson here isn’t simply “prepare for tariffs”, it’s that geopolitical volatility is now a structural feature of global trade. UK exporters need embedded contingency planning, flexible pricing strategies, and diversified market portfolios. Firms overly dependent on a single export destination, particularly the US, are now significantly more exposed to policy swings than in previous decades.
China meets 5% growth target, but export reliance deepens
China announced it achieved its 5% GDP growth target last year, despite continued trade tensions and global headwinds. Full coverage from the BBC can be found here:
https://www.bbc.co.uk/news/articles/cgk8zd287myo
However, much of that growth has been driven by exports, at a time when domestic demand has softened. This increasing reliance on external markets could leave China more exposed to trade disruption if protectionist measures expand further in the US or Europe.
At the same time, China has signalled willingness to explore renewed trade and investment agreements with the EU, according to Reuters:
https://www.reuters.com/world/china/china-says-it-is-willing-explore-trade-investment-agreements-with-eu-2025-11-06/
Alongside this, changes to low-value parcel tax rules are tightening compliance requirements for cross-border e-commerce. Many governments, including the US, EU nations and now UK are closing perceived loopholes around small-value shipments, ensuring VAT and duties are correctly collected.
What this means for UK exporters
There are three significant implications here.
First, if China continues to lean on exports to drive growth, UK businesses should expect intensified competition in third-country markets, particularly in price-sensitive sectors such as consumer goods, electronics and light manufacturing.
Second, any movement on EU–China trade negotiations could reshape the competitive landscape within Europe. While the UK is no longer part of the EU, shifts in EU trade policy often indirectly affect UK exporters operating in similar sectors or supply chains.
Third, tightening parcel and VAT rules reinforce a broader global trend: compliance is getting stricter everywhere, and markets becoming more insular. UK SMEs selling directly into international markets via e-commerce must ensure classification, valuation and documentation are watertight. The era of “informal” low-value exports is steadily closing.
This should though make it easier for UK small businesses to compete online in their own marketplaces.
UK defence exports reach record £20bn
In a continued sign of global instability and strategic realignment, UK defence exports hit their highest ever level in 2025, exceeding £20 billion in overseas sales. The government announcement can be read here:
https://www.gov.uk/government/news/2025-sees-highest-british-defence-exports-since-records-began-in-huge-boost-to-workers-and-companies
This growth reflects sustained demand from allied nations, driven by increased defence spending commitments across Europe, the Middle East and parts of Asia. It also signals confidence in British manufacturing capability and technical expertise within highly regulated, high-value sectors.
While defence is a specialist area, its record performance highlights a broader macro trend: in uncertain geopolitical climates, governments prioritise resilience, infrastructure, security and domestic capability.
What this means for UK exporters
For firms directly within defence supply chains, the opportunity is clear. However, the ripple effects extend further into advanced manufacturing, aerospace, engineering services, cyber security and specialist technology providers.
More broadly, this news reinforces that global turbulence does not necessarily suppress export opportunities. Instead, it shifts demand toward sectors aligned with strategic resilience. UK exporters that understand these macro-demand shifts and align their market targeting accordingly can position themselves advantageously.
An expert word…
On the current state of exports and the global marketplace
“In 2026, the global marketplace is more regulated and fragmented, but still full of opportunity for well-prepared exporters. Supply chains are shifting due to geopolitics and new compliance rules, yet demand remains strong.
“The EU has stabilised post-Brexit, though challenges remain, while growth markets in the Gulf, Asia and Africa are increasingly accessible. Careful market selection has never been more important, combined with robust compliance and strong local partnerships.”
On what UK exporters should watch out for in 2026
“Exporters face tighter rules than ever before – GPSR, CBAM, EUDR, VAT reforms – alongside rising costs and geopolitical risk. This requires stronger planning, documentation and internal expertise.
“But these same pressures present opportunity. Companies that invest in analysing potential markets, strengthening compliance, optimising operating models and improving partner performance will be best placed to grow in 2026.”
UK retailers with regular direct orders into US markets are set for another period of upheaval as a customs charge threshold is set to be slashed.
The tariff exemption on imports, known as a de minimis, enables retailers to export orders into a country without incurring duty charges if the value of the order stays below a certain level.
Up until now, the US had offered one of the more generous de minimis levels, set at $800, compared to $648 in Australia, $181 in the UK, and $174 across the EU (where additional VAT charges are also levied).
This higher-than-standard threshold from the US has delivered years of innovation from retailers around the world since its introduction nine years ago, enabling them to set their sights on wealthy US consumers with direct-to-consumer sales and little in the way of paperwork and additional taxes.
Data from the likes of the OECD has demonstrated this has disproportionally benefited SMEs and start-ups by removing the up-front investment required to otherwise sell products into the US.
In 2021, according to the British Chambers, $5bn of goods from the UK were shipped to the US under the de minimis threshold, with 80% coming directly from e-commerce orders of which fashion accounted for the largest share.
Globally, almost 14 billion packages worth around $65bn fell under the threshold last year and did not incur a duty charge.
But it’s not just online retailers with US audiences that will be hit. Giants such as Shein and Temu, and brands that sell through marketplaces such as Amazon and Etsy will also encounter issues.
When will the change happen, and who will have to pay?
The de minimis threshold of $800 will sunset on Friday 29th August. Shipments from that date of any value will then incur an additional charge ranging from 10% to 50% depending on the category of product.
Many global postal services, including major EU players, have paused or slowed services whilst they await further clarification from US authorities
Who pays the charge is a little muddier. Retailers that wish to keep their direct entry into the US market will likely look to swallow some of that cost and save the end customer from having a bill to pay to receive their goods once it lands in the US.
However, some consumers may end up having to pay the bill themselves, especially from smaller, more niche businesses that may not be entirely up to speed with the legislative change.
The Royal Mail has said that items sold from the UK into the US worth over $100 (including items sent to family and friends) would likely incur a 10% duty charge.
DHL said in a statement that: “Key questions remain unresolved, particularly regarding how and by whom customs duties will be collected in the future, what additional data will be required, and how the data transmission to the U.S. Customs and Border Protection will be carried out.”
Goods originating from the EU will likely be hit by the same 15% tariff as was agreed between the bloc and the US in their new trade agreement.
Long-term, it may push more international sellers to look towards State-side distribution hubs to accept and ship orders from within the US market. This is more aligned with the ultimate aim of the Trump administration – to bring jobs and manufacturing to the US, and raise significant revenues on sales from abroad.
Short term, consumers in the US can expect increased prices, whilst businesses around the world will be faced with increased bureaucracy, delays, and costs.
How do tariffs affect world trade, and how can you best mitigate them?
Join Go Exporting CEO Mike Wilson for a special Lunch and Learn with Enterprise Nation, where you will learn what tariffs are and why they’re in the news right now, their impact on your business and global trade, and how to manage tariffs and the effect of trade agreements.
If you feel that your expansion plans are on hold until trade turbulence subsides, you want to know how to mitigate some of the negative impacts of tariffs or even how to capitalise on the opportunities they can deliver – then this is the webinar for you.
Join us for free on Tuesday 29th July from 12pm here – https://www.enterprisenation.com/find-something/lunch-and-learn-navigating-the-new-trade-tariffs/
Business Secretary Jonathan Reynolds has said an impending trade agreement between the UK and India marks a ‘historic day’ for Britain.
The deal is expected to trigger around £6 billion of investment for the British economy and create over 2,000 jobs. And there’s great news for UK exporters too, with tariffs on a range of goods set to be slashed from 15% to 3% on average for the £11 billion of goods already shipping into the fastest-growing major economy on the planet.
This includes whiskey tariffs being cut in half in the immediate term, and set to fall further over the next five years. Soft drinks, autos and cosmetics will also see rates fall.
In return, the UK is set to import more of India’s textiles, gemstones and other goods.
By 2040, the impact of the deal is expected to deliver a £25.5 billion boost per year.
Kier Starmer and Narendra Modi could sign the deal today as part of a wide-scale meeting, which will likely also discuss illegal migration and the sharing of intelligence.
Starmer has already commented that the deal ‘is a major win for Britain’, further cementing business ties with a key partner with bilateral trade already worth £42.6 billion a year.
He said: “It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change.
“We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we’re determined to go further and faster to grow the economy and raise living standards across the UK.”
Chief executive of the CBI, Rain Newton-Smith, told LBC that: “A trade agreement with India – one of the world’s fastest-growing economies – is a springboard for long-term partnership and prosperity. UK firms can take advantage of this new platform to scale, diversify and compete on the global stage.”
Opportunities for UK firms
This is another in a string of new trade agreements signed by the UK government over the last year and creates an opportunity for ambitious businesses to increase sales into huge new markets.
Read more: UK secures two huge trade agreements in a week: What it means for British businesses
At Go Exporting, we help businesses to capitalise on the growth opportunities that global trade offers. From ambitious start-ups to established international players looking to expand, we support by identifying opportunities, researching the market, and planning the route to success.
Learn more about our exporting growth plans, and our wider international trade consultancy services here.
The UK government has secured two major trade agreements with leading global economies in moves that will present British businesses with a range of opportunities to grasp… and some disastrous outcomes predominantly avoided.
A week of deals began two days ago with the announcement of a truly historic free trade agreement with India, the fastest-growing economy in the G20 and a market over over a billion consumers.
The government estimates that the agreement will boost bilateral trade by £25.5 billion, remove trade barriers, and make it easier for UK and Indian businesses to send talented workers to each other’s countries.
Standard Chartered CEO and head of coverage in the UK, Saif Malik, noted that: “The UK-India Free Trade Agreement is a significant achievement. It will create new opportunities for UK and Indian businesses, enable greater access to one of the world’s largest and most dynamic markets, and drive growth and innovation across the UK-India corridor. “
First, the UK has lowered taxes on goods imported from India, including clothing and footwear, jewellery, some cards and food products.
India, in return, has cut rates on imports from the UK spanning cosmetics, scotch whiskey, luxury cars, lamb and salmon, aerospace products and electrical machinery.
For UK luxury carmakers currently caught in the crosshairs of Trump’s auto tariffs (although more on that later), this will come as particularly good news, as it will for Welsh sheep farmers, fisheries, and whiskey producers in the Highlands.
The deal isn’t in effect straight away, though, and there is some staggering of tariff reductions. For example, tariffs on whisky imported from India to the UK will be halved to 75% to begin with, and eventually reduced to 40% after 10 years. Car tariffs will see a more immediate drop, from 100% now to 10% as soon as the deal comes into effect.
Why this deal is significant for UK businesses and also the economy is that India is a thriving, fast-growing economy with a steadily growing middle class. Yet exports and imports to this thriving market are less than 2% of total output for the UK. In fact, we sell nearly 3x as much to the Netherlands as we do to India right now.
The deal is therefore a nice-to-announce now, but could be fundamental to future UK economic growth in the future. If India’s economy continues to surge, and there are some forecasts which suggest it could become the 3rd or 4th major economy in the world and could end up adding $1tn in exports by 2030.
So the question for the UK businesses right now should be, can we get in on that economic action?
And what about the agreement with the US?
Perhaps more consequential in the immediate term is the new trade agreement between the UK and the US – the first such agreement that the Trump administration has announced since upending global trade with his tariff war.
The full details of the agreement are still to emerge, but here’s what we know so far:
- 10% tariffs still broadly apply
- 0% tariffs on steel and aluminium
- The UK auto sector can send 100,000 vehicles into US at a 10% tariff, not 25%, protecting tends of thousands of UK jobs in auto manufacturing. Currently, the UK sends 101,000 vehicles a year, so the deal represses growth but protects industry in its current state.
- Rolls-Royce engines to continue being sold in US tariff-free
- UK buying £10bn US planes – to be detailed and announced later on
- A special agreement for the pharmacy sector with a ‘significantly preferential outcome’ according to the Prime Minister
- US agriculture will have more access to UK markets for things like beef with reduced taxes on ethanol too
More technical details and the full text of the agreement are to be released shortly.
The view from Go Exporting
Go Exporting CEO Mike Wilson has shared his thoughts on what this consequential week for exporting news means for UK firms:
“You wait around for half a decade (since Brexit) for a consequential trade deal, and then two come along at once.
“The free trade agreement with India is truly historic and has been years in the making. It opens up the world’s fastest-growing economy with a huge and emerging middle-class consumer base to numerous critical British industries, spanning aerospace to whiskey.
“The economic and opportunity uplift from this agreement will take some time to play out, but businesses that make moves today will be best placed to benefit from the opportunities that will arise tomorrow.
“Critical for UK firms in the here and now is the newly announced deal with the US. The government has done well to muscle its way to the front of the queue with the White House to arrange such an agreement, and it will bring some peace for key UK sectors, including critical automotive firms.
“Although 10% tariffs remain for most, there are benefits for auto manufacturers, steel and the aerospace industry. Farmers may pay the price with the opening of the UK market to US beef, however – we will know more as the full text is released.
“The devil may be in the details, so let’s wait and see, but the sentiment seems to be to move forward to the benefit of both countries.”
This article was written for Go Exporting by 24:Hour Authorised Representatives, specialists in AR services.
Expanding into the European Union (EU) offers significant growth opportunities for exporters, but it also comes with regulatory obligations, particularly concerning product safety. The General Product Safety Regulation (GPSR), which strengthens consumer protection and market surveillance, sets stringent requirements for businesses selling products in the EU. Failure to comply can lead to severe financial penalties, product recalls, and reputational damage.
This article explores the key aspects of GPSR compliance that exporters must consider when entering the EU market.
Understanding GPSR and Its Applicability to Exporters
The GPSR applies to any company placing consumer products on the EU market, whether established within or outside the EU. Exporters must ensure that their products meet essential safety requirements, comply with EU standards, and undergo proper risk assessments before being sold.
The regulation aims to enhance consumer safety by holding businesses accountable for ensuring their products do not pose risks to health and safety.
Key principles of GPSR include:
- Product safety: Products must meet EU safety standards and be free from hazards under normal and foreseeable use.
- Risk assessment: A comprehensive analysis of potential risks must be conducted for each product.
- Compliance documentation: Proper documentation, including conformity assessments and technical files, must be maintained.
- Market surveillance: Authorities can conduct inspections, issue recalls, and enforce corrective actions for non-compliant products.
- Consumer rights: Clear instructions, warnings, and traceability information must be provided to consumers.
- Accountability: Economic operators, including manufacturers, importers, and distributors, must ensure compliance throughout the supply chain.
Key Compliance Considerations for Exporters
1. Ensuring Product Safety and Compliance with EU Standards
Exporters outside the EU must verify that their products comply with relevant EU safety directives and regulations, including:
- Specific EU harmonised standards for regulated products such as electronics, toys, and medical devices.
- Chemical safety regulations under REACH (Registration, Evaluation, Authorisation, and Restriction of Chemicals).
- CE marking requirements for products covered by sector-specific EU regulations (note that CE marking does not apply universally under GPSR).
2. Conducting Risk Assessments and Safety Evaluations
Exporters must conduct thorough risk assessments to identify potential hazards. This includes:
- Evaluating the intended and foreseeable use of the product.
- Identifying mechanical, chemical, electrical, or safety risks.
- Implementing mitigation measures to minimise risks.
3. Establishing Clear Traceability Systems
GPSR requires economic operators to maintain clear records for product traceability. Exporters should ensure:
- Products are marked with batch or serial numbers.
- Manufacturer/importer details are included on packaging.
- Documentation proving compliance is retained for at least 10 years.
4. Appointing an EU-Based Responsible Person
Non-EU exporters must designate a Responsible Person within the EU to handle compliance issues and liaise with market surveillance authorities. This individual ensures that products meet GPSR requirements and are appropriately documented.
5. Labeling and Providing Consumer Information
Products must include:
- Accurate and clear labeling in the official language(s) of the destination country.
- Instructions for safe use and maintenance.
- Warnings or precautions where necessary.
6. Preparing for Market Surveillance and Compliance Checks
EU authorities actively monitor and inspect products to ensure compliance. Exporters should be prepared for:
- Random product checks and document verification.
- Potential recalls or corrective actions for non-compliant products.
- Collaboration with authorities in case of safety concerns.
7. Implementing a Product Recall and Incident Reporting System
In case of safety risks, exporters must:
- Have a recall plan in place.
- Notify relevant EU authorities through the Safety Gate system (formerly known as RAPEX).
- Inform consumers and take immediate corrective actions.
8. Verifying Supplier and Supply Chain Compliance
Many exporters rely on third-party manufacturers. To ensure compliance:
- Conduct due diligence on suppliers and verify their adherence to EU standards.
- Include product safety clauses in contracts.
- Regularly audit production processes and material sourcing.
9. Maintaining Technical Documentation
Exporters must compile and store compliance documentation, including:
- Risk assessment reports.
- Test results and safety certifications.
- Technical files detailing product specifications and materials used.
10. Training Staff on Product Safety Requirements
Ensuring employees understand GPSR requirements is crucial. Regular training should cover:
- Identifying potential safety risks in products.
- Understanding EU labeling and documentation requirements.
- Responding to compliance inspections and recall situations.
Consequences of Non-Compliance
Failure to comply with GPSR can lead to severe consequences, including:
- Product recalls and removal from the EU market.
- Fines and legal actions from regulatory authorities.
- Damage to brand reputation and loss of customer trust.
- Restrictions on future exports and market entry bans.
Steps to Achieve GPSR Compliance
For exporters entering the EU market, the following steps can help ensure compliance:
- Assess product safety: Identify risks and implement necessary safety measures.
- Verify compliance with EU standards: Ensure adherence to relevant directives and regulations.
- Establish clear documentation: Maintain detailed records for traceability and audits.
- Appoint an EU representative: Designate an authorised representative to serve as a Responsible Person for compliance oversight.
- Develop a recall and incident response plan: Prepare for potential safety concerns.
- Train employees and partners: Educate staff and supply chain partners on safety requirements.
- Engage with compliance experts: Consult regulatory professionals for guidance.
Conclusion
Expanding into the EU presents lucrative opportunities for exporters, but GPSR compliance is a critical consideration. By understanding product safety requirements and implementing robust compliance measures, exporters can build trust with EU consumers, avoid penalties, and establish a strong presence in the European market. Prioritizing safety not only ensures regulatory compliance but also enhances brand reputation and long-term business success.
Mark your diaries for what may be one of the less jovial contenders for a new national holiday in recent history. On the 2nd April, a date branded as ‘Liberation Day’ by President Donald Trump, the United States will impose sweeping 25% tariffs on imported cars and automotive parts.
The controversial measure aims to revitalise domestic manufacturing, a cornerstone of Trump’s ‘America First’ strategy, but it’s a move that will hit both partner and competing economies hard – including the UK’s carmakers.
How will the UK automotive sector be impacted?
The UK automotive sector, having just regained its feet after Brexit, and the pandemic, and surging energy prices, is going to be hit hard. Jaguar Land Rover is especially exposed as it exports 100% of its US sales with no state-side manufacturing base. Vehicle prices will rise, curbing consumer demand across the Atlantic and risking profitability for one of Britain’s iconic luxury carmakers.
According to industry analysts cited by The Independent, the UK automotive sector could see costs increase substantially, putting thousands of jobs at risk across manufacturing hubs in the West Midlands and North East of England.
Other car giants around the world which are particularly exposed include Volvo, Mazda, VQ, Hyundai and the German saloon giants too.
Impact beyond UK borders – the global automotive tidal wave
The tariffs will also cause some collateral damage. Major manufacturers such as Tesla and Ford heavily rely on international supply chains, sourcing parts from China and other global manufacturing hubs. The US automotive sector, therefore, faces increased production costs, which will inevitably pass down to American consumers, potentially dampening domestic car sales and manufacturing employment – especially for newer vehicles.
Data from industry bodies shows that a typical car manufactured in the US includes approximately 40% imported parts, underscoring the interconnectedness of global automotive production.
UK exemption hopes fading
The UK had previously hoped to secure an exemption from these damaging tariffs, particularly following a notably positive diplomatic visit by Prime Minister Keir Starmer to the White House.
However, the mood music out of Downing Street has darkened and it looks a though the UK will be lumped in with everyone else when it comes to auto tariff treatment.
Mixed reaction in the USA
In the United States, reaction to the tariffs has been deeply divided. Supporters, primarily from manufacturing regions in the Rust Belt, see tariffs as a necessary measure to restore domestic production capabilities and protect American jobs. Opponents, however, warn that higher tariffs will escalate vehicle prices for US consumers, reduce sales volumes, and potentially trigger job losses across the automotive retail and repair sectors.
Economists warn of broader impacts too, including reduced consumer spending power, increased inflationary pressures, and heightened risks of economic recession – potentially counteracting any intended economic gains from the tariffs.
Short-term and long-term strategies for UK businesses
So, what can UK-based auto firms do? In the immediate term, exporters should brace for disruption. Firms should urgently assess their exposure to US markets, actively monitor pricing strategies, and potentially explore absorbing short-term costs to retain market share. Strengthening supply chain resilience through alternate sourcing and stockpiling critical components will also be prudent, something that US firms have been doing since Trump returned to the White House.
For longer-term stability, diversification remains essential. UK companies heavily reliant on the US as a large percentage of its sales base should actively explore new international markets, particularly in growing economies in Asia and Africa, alongside reinforcing trade partnerships within Europe and Commonwealth countries.
This is a turbulent time for businesses on both sides of the pond. Having honest, open and constructive dialogue with suppliers and customers will be essential.
The good news? Literally everyone is in the same boat. As with Brexit, those who adapt best will be best place to ride out this tide of tariffs and come out swimming on the other side.