Sir Crawford Falconer KCMG, former UK Chief Trade Negotiation Adviser and now Senior Counsel at Bradshaw Advisory, on how UK businesses can adapt to the post-Trump reality.

The world after 2 April 2025 is very different to the one before. President Trump’s self-styled ‘Liberation Day’ has shattered the free trade consensus of previous decades, replacing it with a return to a more transactional, realpolitik order. The consequences have hit balance sheets and demand a new corporate strategy from businesses.

The new rules of the game

While an issue by issue approach to trade will always be needed, the new geopolitical order demands a more complex, strategic approach to strengthen security and trade between Westminster and Washington. Businesses have a role to play.

Where things stand

While the initial ‘US-UK Economic Prosperity Deal’ provided some stabilisation, uncertainty remains on a number of issues:

Steel and steel derivatives: the reduction to zero duties for the UK has not been implemented and the US’ expansion of the 25% steel tariff to so-called ‘steel and aluminium derivatives’ products will hit a wider range of products and appliances.
Pharmaceuticals: the initial US-UK agreement broadly indicated a preferential status for the UK would prevail. Instead, the threat of a 100% US tariff is being employed to extract UK concessions on pharmaceutical pricing.
In other sectors such as ‘large trucks’, manufacturers are also unable to rely on the presumption of a previously mooted 10% tariff.

The new reality is that the old rules of the game no longer apply. We have crossed the rubicon.

What will happen next?

Looking at the road ahead, two moments stand out:

1. The application of the Carbon Border Adjustment Mechanism (CBAM) by the UK (and the EU)

While it is not yet clear what the impact will mean for US exporters to the UK, past comments by US businesses suggest they are concerned. Therefore a realist would assume Washington will respond with disproportionate force.

2. The US Supreme Court’s upcoming adjudication of the International Economic Emergency Powers Act (IEEPA)

If the Court decides the President did not have the power to apply the tariffs, expect more chaos to follow. Will we see repayment? Will new tariffs replace them? Whatever happens, a calm return to the status quo is unlikely. Oral arguments have just started with the Supreme Court having until July next year to issue its verdict.

There is no reason to simply play defence

While ongoing efforts are being made by the UK government to manage these issues, UK sectors and producers should not be passive.

Inspiration can be taken from the civil aircraft sector, which stabilised its zero tariff status. The UK’s ability to secure better arrangements reflects our unique political and security based relationship with the US. This strength can be used by businesses to further improve the trade and security relationship.

Trade and security are now one and the same

Economic and national security have always been inseparable. Today, our infrastructure and firms are being increasingly targeted by adversaries and hostile states. Our supply chains are being manipulated. Corporate and state sponsored espionage, and cyber attacks are on the rise.

As close allies the US and UK benefit from standing together. And greater trust should translate into greater trade opportunities.

If we get critical sectors like technology right first, then others should follow.

Making digital and technology absolutely priority in the US - UK relationship

The US is the global leader in tech. But the UK is the second largest digital exporter: 90% of our global financial services exports were delivered digitally, while 85% of telecoms, computer and information services exports were digital.

US companies already export just under $70 billion in digital services to the UK and they have been growing at around 10% per annum. Over 3 million US jobs are dependent on that business.

The recent US - UK Memorandum of Understanding is a start. But key issues that need to be addressed include:

Consolidating the US-UK data bridge.

Revising the UK’s digital services tax - where it is clear that the US Administration wants to revert to this.
Aligning governance frameworks on AI, quantum and cyber - looking at either harmonisation or at least mutual recognition.
Sorting out copyright regimes to ensure we are attractive for the tech and AI sector.
An approach on matters like data mining and data privacy that incentivises investment.
Collaboration on R&D and skills - for example in nuclear - that can enable the energy intensive needs for these sectors.

Building on the special relationship

If the US and UK can deepen cooperation in trade and security in critical sectors like technology, the same approach can be applied to other crucial areas such as pharmaceuticals, rare earths and critical minerals. This then will set a framework for not only other sectors, but the rest of our allies to follow.

The age of globalisation and free trade is over and a new age of strategic partnership based on trade and security has begun. Businesses must adapt, or get left behind.

Read more about Bradshaw Advisory’s UK-US strategic alliance with the top US lobbying firm, Akin here.

How to thrive in the new era for global trade