US Tariffs: The New Normal
UK exporters to the United States face a 10% baseline tariff on most goods under the UK-US Economic Prosperity Deal agreed last May. Steel and aluminium exports face 25% duties unless manufacturers can demonstrate "melt and pour" origin requirements - the detail of which is still being finalised. Automotive exporters have a 100,000 vehicle quota at 10% before rates jump to 25%. Meanwhile, legal challenges to President Trump's tariff powers under the International Emergency Economic Powers Act continue, with the US Supreme Court hearing oral arguments in November 2025. Businesses exporting to the US should review their tariff exposure and explore whether classification reviews or origin planning could reduce their liability.
EU CBAM: The Bills Arrive
The EU's Carbon Border Adjustment Mechanism entered its definitive period on 1 January 2026. UK exporters of steel, aluminium, cement, fertilisers and hydrogen to EU customers need to understand that their buyers will now purchase certificates to cover the embedded carbon in imported products. Certificate purchases begin in February 2027 for 2026 imports, priced against EU Emissions Trading System rates. Critically, default emission values now carry a 10% markup - rising to 20% in 2027 and 30% from 2028. UK manufacturers who can provide verified actual emissions data will give their EU customers a competitive advantage and protect their market position.
UK CBAM: Preparation Year
While EU CBAM affects UK exporters, the UK's own Carbon Border Adjustment Mechanism - launching 1 January 2027 - will affect UK importers bringing goods into this country. It covers the same sectors: aluminium, cement, fertilisers, hydrogen, and iron and steel. 2026 is the preparation year - HMRC will publish detailed guidance and draft secondary legislation for consultation. Importers bringing in more than £50,000 of CBAM goods annually will need to register and prepare emissions reporting systems.
UK-India FTA: A Genuine Opportunity
The UK-India Comprehensive Economic and Trade Agreement, signed in July 2025, is expected to enter force in the first half of 2026. UK exporters to India will benefit from eliminated or reduced tariffs on approximately 90% of tariff lines, plus unprecedented access to India's federal government procurement market - a first in any Indian trade deal. For manufacturers, the tariff reductions on machinery and engineering goods are particularly significant.
EUDR: Delayed but Not Forgotten
The EU Deforestation Regulation has been pushed back again - large operators now face a 30 December 2026 application date. UK exporters placing cattle, cocoa, coffee, palm oil, rubber, soy, wood or derived products on the EU market must demonstrate these are deforestation-free through due diligence statements and geolocation data. A Commission simplification review is due by 30 April 2026, so further changes remain possible.
Digital Product Passports: Building Momentum
The EU's central Digital Product Passport registry launches in July 2026, with mandatory requirements for batteries beginning February 2027 and textiles expected mid-2027. UK manufacturers exporting to the EU in these sectors should start mapping the data they'll need to capture across their supply chains.
Looking Ahead
We'll be tracking each of these developments throughout the year. If any of these changes affect your business and you'd like to discuss your options, Hooper & Co provides specialist support on customs compliance, CBAM preparation, and international trade strategy.
David Hooper is Managing Director of Hooper & Co International Trade Consultancy
