The uk in a contested world - now is the time to deliver and implement the trade strategy
The UK must act now or we risk our long-term economic security
Tamsin Morgan, Senior Consultant at Bradshaw Advisory
2026 has been marked by intensifying geopolitical competition, a rise in industrial policy interventions, and the increasing weaponisation of trade. Our open trade agenda is under pressure and with it, the foundations of our long-term economic security.
Nearly a year on from publication of the UK’s Trade Strategy, there remains a widening gap between substantive action and operational delivery. At a time when allies and competitors alike are deploying coordinated industrial and trade policy at pace, the UK risks falling behind.
UK industry must play a more assertive role in shaping the UK’s trade priorities, influencing policy delivery, and identifying where government intervention can unlock long-term competitiveness.
This is part 2 of 3 in a series. In part 1, I explored the growing pressures on the UK’s economic security agenda. This piece examines the Government’s delivery against its 2025 Trade Strategy and argues that the pace of implementation is insufficient given the scale of the risks now facing the UK economy.
Ten key recommendations to the UK Government
To deliver in the long-term interests of the UK’s economic security, the Government must:
Establish a genuine government-industry partnership that provides actionable intelligence, real-time data, and coordinated action to build supply chain resilience in our most critical goods.
Publish a clear pipeline of priority trade agreements focused on diversifying supply chains and reducing strategic dependencies, including deeper engagement with Mercosur and key ASEAN economies.
Prioritise security of supply of certain critical minerals, delivering targeted policies that credibly support domestic production, international partnership, and supply chain diversification.
Conduct rigorous sector-by-sector analysis of the costs and benefits of deeper UK-EU integration, ensuring any future alignment is driven by competitiveness.
Apply lessons from the UK’s new steel trade measures to ensure future sector strategies are informed by robust analysis, consultation, and a comprehensive impact assessment.
Modernise and strengthen the UK's existing trade defence toolkit, ahead of the pursuit of escalatory retaliatory instruments e.g. a ‘trade bazooka’.
Establish a business-led China Advisory Council to provide ministers with market intelligence, commercial expertise, and evidence-based advice on UK-China economic relations.
Publish a China Strategy that provides businesses the clarity on the Government’s overarching approach to engagement, resilience and national security.
Strengthen the commercial capability of the UK's overseas network, ensuring diplomats, trade officials, and private-sector partners can provide practical support to exporters in priority markets.
Publish a ten-year Export Strategy targeted towards UK SMEs, to promote, incentivise and accelerate trade growth.
UK Trade Strategy
Last summer’s publication of the UK Trade Strategy marked the first substantial attempt to define a post-EU trade framework. The strategy set out the international context in which the UK finds itself and how it will navigate “turbulent storms” to drive trade growth and better protect our economic security.
Three early deliverables were positioned as evidence of momentum: the UK-India Free Trade Agreement (FTA); the UK-EU Sanitary and Phytosanitary (SPS) agreement; and, the UK-US Economic Prosperity Deal.
Looking forward, the strategy signalled a shift in approach. A focus on more targeted and sector-driven trade agreements, greater agility in responding to economic threats, and an upgrade to trade defence instruments, improving the UK’s ability to protect against dumping and subsidy distortions.
Yet despite clarity on diagnosis and intent - the Government has been thin on delivery.
Five gaps in policy delivery
The following illustrates where implementation has stalled and where deeper partnership between government and industry is now essential.
Supply chain resilience
At the heart of economic security are resilient supply chains.
The Trade Strategy commits the Government to improving its ability to monitor and respond to disruptions across global sectors and supply chains. Central to this ambition is the creation of the Supply Chain Centre, a new data-led government unit, alongside the Economic Security Advisory Service (ESAS), which is intended to work "hand-in-glove" with business to strengthen supply chain resilience.
These commitments are welcome. However, five years on from the COVID-19 pandemic - when the trade department first established its supply chain capability - there is a reasonable expectation that the Government would have moved beyond rhetoric and high-level frameworks towards meaningful delivery. At a time of heightened geopolitical instability, our businesses need actionable intelligence, real-time data, and effective government partnership to identify, assess and mitigate emerging supply chain risks.
The challenge is not the creation of new functions, but the development of a mature public-private partnership capable of driving resilience across critical sectors. This should include incentives for supplier diversification and strategic stockpiling, mechanisms to unlock both public and private finance for firms seeking to reduce concentrated dependencies, and enhanced early-warning systems that provide real-time risk analysis, customs intelligence and disruption forecasting.
Yet progress remains limited. The Supply Chain Centre is still in its nascent stage and has yet to establish itself as a meaningful partner to industry. Similarly, ESAS appears, in practice, to overlap significantly with the traditional role performed by the now-defunct Centre for the Protection of National Infrastructure (CPNI). Neither initiative, in its current form, appears sufficient to address the scale and complexity of the threats facing UK supply chains.
The deeper issue is that the UK still lacks the institutional mechanisms needed to coordinate targeted action across trade policy, industrial strategy, procurement and investment incentives. Without this ability, efforts to strengthen resilience in strategically important supply chains will remain fragmented and reactive. Strikingly, the UK is now less prepared for a pandemic than it was in 2020.
This also raises a broader strategic question. The UK continues to champion open, free and fair trade in an increasingly protectionist world. Yet resilience cannot be achieved through domestic production alone. The UK lacks the scale, resources and economic rationale to onshore all critical supply chains, nor would such an approach necessarily enhance national security.
Instead, resilience depends upon building diversified and trusted international partnerships. In this context, the Government's increasingly narrow approach to trade agreements risks limiting the UK's ability to develop the broad network of supply chain relationships needed to manage future shocks and reduce strategic dependencies.
The Government should publish a forward pipeline of priority trade negotiations focused explicitly on resilience and diversification. This should include accelerating engagement with Mercosur, strengthening trade and investment partnerships with ASEAN economies, and delivering targeted supply chain agreements covering the UK’s most vulnerable imports, specifically semiconductors, battery technologies, and clean energy inputs.
The approach to critical minerals illustrates the gap between ambition and delivery. Despite the third Critical Mineral Strategy in four years, there remains little clarity on how the government intends to unlock commercial investment, scale domestic processing capability, or secure long-term supply. And while Memorandum of Understanding’s with both the US and Kazakhstan on critical minerals acts as a strong political signal, MoU’s traditionally provide limited depth to their commitment.
Critical minerals is just one key sector in which the Government must transition from intent to action. The Government should work with industry to fully evaluate which materials should be prioritised for domestic production, international partnership and diversification, and establish an investment fund for critical minerals to allow for swift, proportionate and fairly allocated government finance across the sector and its value chain. There should be a specific focus on unlocking private finance for joint partnership.
2. The UK-EU ‘reset’
A trading relationship that has tested our economic security over the last ten years.
The Government’s rhetoric surrounding the need for the UK-EU reset has been clear: we must adopt a more pragmatic and cooperative approach to our closest trading partner, while preserving regulatory and political autonomy.
In recent weeks and in response to new geopolitical challenges, the PM has advocated for “dynamic alignment” with the bloc. The King’s Speech confirmed the intent to introduce a new European Partnership Bill that could significantly deepen cooperation across standards, regulation, mobility and industrial collaboration.
At the same time, politics remains complex on the continent too. Some EU member states ‘resistance’ to closer partnership has been significant. French ministers have been particularly vocal that Brexit means Brexit. Other EU leaders have said that the upcoming Trade and Cooperation review will not allow for any revisions of amendments - it is simply a technical exercise.
Against this backdrop, the Government must move beyond broad political messaging and undertake detailed sector-by-sector analysis of where deeper integration would materially improve UK competitiveness. This should include analysis of rules of origin, industrial cooperation - linking to the UK’s IS-8, professional mobility, and mutual recognition of conformity assessments.
There should also be greater analysis undertaken on where UK firms would likely be at a greater disadvantage as a result of European industrial policy interventions, and coordinate response accordingly. This would require deeper engagement with industry, regulators and trade experts, with dedicated support to UK businesses trading with the EU where there is widening regulatory divergence. At the same time, the Government must more actively challenge where the EU creates unnecessary barriers to cross-border trade.
Defra’s recent Call for Information on the UK-EU Sanitary and Phytosanitary Agreement (SPS) demonstrates the value of business engagement to ensure the UK strikes the right balance between deeper integration with EU standards and regulations. The priority now is to assess the cumulative impact of greater UK-EU alignment across our key sectors before proceeding further with the European Partnership Bill.
The EU is highly unlikely to let the UK ‘cherry pick’ - the Government must be clear on what will materially advance UK economic growth and have the data and political will to back it up.
3.The UK’s trade defence framework
Improving defence mechanisms to protect against future economic challenges.
In response to rising protectionism and market distorting practices, Starmer’s Government has advocated for an upgrade in the UK trade defence toolkit. The Trade Strategy outlined how the Government would “create new powers to face new threats”.
The strategy committed to reform the Trade Remedies System - recognising that it needs to be ‘sharper’ in dealing with new and emerging threats. The Finance Act 2026 provides the legal foundation for change, including new powers for ministers to direct investigations, further secondary legislation is required before these reforms take effect. The Government should accelerate implementation of trade remedies reform while ensuring that the Trade Remedies Authority has the analytical capability and sector expertise needed to act strategically.
As for the new Steel Strategy that was announced in March, the Government must weigh up the costs and benefits of this new level of intervention, and take into account how such measures might impact the UK’s industrial base and lead to countermeasures and unintended consequences downstream. Ahead of any future sector-specific strategy, the Government must ensure that appropriate analysis, industry engagement and impact assessment has been thoroughly undertaken.
Questions remain on the UK’s stance on measures such as the EU’s anti-coercion instrument (ACI). Adopted by the bloc in 2023, the instrument is a retaliatory response to coercive economic measures as implemented by Trump and other trade partners.
A new government consultation has sought industry views, but it is unclear if the Government actively wants to pursue more aggressive instruments having previously advocated against this type of tit-for-tat behaviour, acknowledging the potential and real risks to the UK. Such consideration requires deep analysis and consideration of countermeasures and long-term economic impact. The Government should resist the development of its own ‘trade bazooka’ and seek to refresh its existing defensive tools so they can be used more strategically to counter future economic threats.
4.UK-China dynamics
A systemic challenge to UK economic security.
Starmer kick-started the year with the first PM-led trip to China since Theresa May in 2018. This was largely identified as a ‘reset’ in relations, with the Trade Strategy published six-months before outlining how the UK must establish a “more mature, stable, and balanced relationship with China”.
The PM may have seen the visit a success - a number of agreements announced in the trip’s conclusion, including on bilateral services, visa rules and conformity assessments. But the omission of further detail on these announcements shows the one-sided power dynamic - China dominating in policy implementation - or lack of.
It speaks to the wider challenge of the UK-China relationship and the need to “carefully define the unique nature of our important trading relationship with China” - balancing deeper integration with UK defence of our national security. But China was only worthy of a half-page in the 100-page Trade Strategy.
This is not fit for one of the UK’s largest trading partners and a country of massive strategic importance to UK critical imports. The absence of a detailed and publicly available strategy for managing the relationship leaves businesses uncertain about the Government’s long-term direction.
The Government should therefore publish a dedicated China Strategy that clearly defines the boundaries between engagement, resilience, and national security. Businesses require far greater clarity on which sectors are considered strategically sensitive, how investment screening will evolve, and where deeper commercial engagement remains encouraged. This will provide businesses the long-term assurance that will strengthen their investment and commercial competitiveness.
The strategy should include a more targeted approach to reducing strategic dependencies in sectors such as semiconductors, advanced electronics, and critical minerals. At the same time, it should identify sectors where UK firms retain opportunities for commercially valuable engagement with Chinese markets - and outline how the Government will use future engagements such as the UK-China Joint Economic and Trade Commission (JETCO) and Economic and Financial Dialogue (EFD) to deliver results for British businesses.
To support, a dedicated business-led China Advisory Council bringing together major exporters, UK SMEs, investors and market experts can provide the real-time evidence-base to inform what a coherent China Strategy should look like.
5.UK Export Strategy
Integral to our resilience, often forgotten about.
UK exports are an essential pillar of economic growth and long-term security. But a challenging commercial environment contextualised by growth-restrictive regulations and a fragmented international system has limited opportunity. The UK is losing its comparative advantage in services exports, and remains uncompetitive in goods exports.
The Trade Strategy acknowledged the need for stronger export support through UK Export Finance, more targeted trade agreements, and enhanced promotion of UK capabilities abroad. However, these ambitions have been undermined by reductions in export support services and pressure on the UK’s diplomatic and trade network. Our SMEs are particularly exposed. To provide cover for the current gaps in export support capability, the Government must lean on the expertise of private partners to help deliver practical support to UK exporters in key global economies.
The UK has also focused disproportionately on securing imports to strengthen resilience, often overlooking the strategic importance of export strength to economic security. Around 6.5 million UK jobs remain linked to exports, and the UK’s long-term competitiveness depends on expanding access to high-growth international markets. Recent international developments only reinforce this urgency. US tariff escalation, the EU’s “Made in Europe” agenda, and major EU trade agreements with India and Mercosur all risk eroding UK competitive positioning if we fail to respond strategically.
The Government should therefore publish a dedicated ten-year Export Strategy aligned to industrial policy, skills development, and investment priorities. The strategy should be focused on where the UK can realistically lead in exports, and provide tailored support to exporters accordingly. This should include tax incentives for first-time exporters, greater support to businesses accessing export finance, and market-entry advisory support.
There is also a strong case for significantly strengthening the UK’s commercial diplomacy capability. Trade commissioners and embassy networks should undertake more thorough commercial training, so that they are better equipped to deliver results for UK businesses. There is also scope for improving how UK SMEs access and engage with our diplomatic network - often lacking in knowledge and understanding of how our international footprint supports commercial growth.
From direction to delivery
The defining weakness of the Government’s Trade Strategy has been the absence of implementation at the pace and scale required to adapt with current challenges and future threats. Across our supply chains, trade defence, exports, and relationship with the EU and China, businesses continue to face uncertainty around delivery, coordination, and long-term direction.
At this critical juncture for the UK’s trade and economic security, we require a fundamentally different partnership between government and industry - one built not simply around consultation, but around co-delivery, shared risk, and strategic coordination.
My next post will set out how Bradshaw Advisory intends to support delivery of this.
