“September was a poor month for UK trade. Goods exports fell to the US, EU and the rest of the world. The impacts of the JLR cyber-attack were clearly felt in a slump in automotive exports to the US, but other export sectors also declined.

“It is also a concern that services exports took a hit too. Across the third quarter of 2025, goods exports saw a small decline. But tariffs continue to have an impact, with an 11% year-on-year drop in the value of goods exports to the US in Q3.

“It is crucial that policy measures accompanying the forthcoming Budget relieve the pressures on traders. This means customs reforms to make goods movements quicker and simpler including a firm commitment to the UK Single Trade Window.

“The government should also look to boost the export capacity of established exporting companies through trade accelerators.”

Goods Exports – September

UK goods exports fell by 5.1% in volume terms when compared with August, with the EU dropping by 2.4%, alongside a 7.6% decline to the rest of the world.

Sales to the US fell by 11.4% month-on-month in value terms, with drops across multiple sectors.  These included a £0.3bn fall in chemicals exports and a £0.1bn decrease in machinery and transport equipment exports, including automotives (affected by the JLR shutdown). UK goods exports to the US are now 20% lower in value terms than they were in September 2024.

Goods Imports – September

The volume of goods imports into the UK also fell in September by 1.6% overall. This was comprised of a 3.8% fall from the EU, set against a 0.7% rise from the rest of the world.

Services – September

UK services exports were 0.7% lower than August, in volume terms. Imports of services into the UK rose by the same percentage.

The picture for Q3

Taking Q3 2025 as a whole and comparing UK goods exports to the US with the same quarter last year, they are now 11% lower in value terms.

Comparing Q3 2025 with Q2 2025, total exports in goods and services declined by 0.2% in value terms, with imports rising by 1%.

Goods exports fell by 0.7% in value terms compared with Q2 2025, while imports rose 1.5%. Services exports and imports increased by 0.2% and 0.1% respectively.

More detail on the ONS data can be found here.

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“Businesses will be watching these talks very closely in the hope of divining some certainty on the direction of travel for global trade.

“There were some encouraging signs last weekend as the US agreed trade deals with Malaysia, Cambodia, Thailand and Vietnam, with a focus on tariffs and critical minerals.

“But a deal with China would be the major prize of this trip, given additional 100% duties are due to apply to Chinese goods exports to the US from Saturday morning.

“Hopefully China can reach terms with the US on export controls on rare earths and soyabean imports to avert these additional huge tariffs.

“Yale University Budget Lab’s recent update on the impact of tariffs on the US economy finds a persistent 0.4% reduction in GDP due to the impact of higher duties. This has big implications for businesses wherever they are based.

“Across the world, next Saturday will see the introduction of further section 232 US duties on imports of medium and heavy trucks and buses to the US. For the UK this means 25% duties on truck exports and 10% on buses.

“The US has justified these on the grounds of national security, given that 70% of domestic US freight is moved by truck or bus.

“Decisions on pharmaceutical and semiconductor tariffs are expected soon as well, which could have major implications for the UK economy.

“Many of our manufacturers will also be anxiously awaiting updates on whether US levies could be extended to more steel products, such as window and doorframes.

“With so many decions yet to be made, firms will continue to be wary, but an agreement between the world’s two biggest economies would go some way to settling nerves.”

The BCC’s US tariff explainer sets out all the developments on trade with the US and is regularly updated.

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“UK trade is heading along two distinct paths. There is a steady rise in services, which already account for more than half of UK exports, but trade in goods remains in flux. Manufacturers are still adjusting to the new realities of global trade policy and uncertainty around further tariffs remains high.

“Trade in goods with the US has plunged since higher tariffs were introduced. The full impact of the US de minimis exemption removal is yet to be fully reflected in the data and is weighing heavily on UK traders. In many sectors, trade in goods with the EU and other non-EU countries also stayed flat during August.

“Growth remains fragile and more needs to be done to leverage new and upgraded trading terms with the US, the EU and Indo-Pacific regions to boost our export performance.

“Our Budget submission calls upon government to implement customs reforms and trade accelerators to make goods trade simpler, cheaper and faster with key UK markets. This data suggest that should be even more of a priority for policymakers.”

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“This report is a call to action for business and policymakers worldwide to ensure we realise the full benefits of AI in boosting global trade, productivity and skills.  

“It identifies a possible AI premium for global economic growth of 12-13% and goods export growth of up to 37% by 2040. AI can boost exports by reducing red tape, speeding up journey times, and cutting customs delays. AI-services are also highly exportable, and can be a major source of growth, in an area where the UK is already a world leader. 

“But tariff and technical barriers to trade need to be dealt with to allow AI to realise these full gains. We also need to ensure that electronic transmission of services across the world remains tariff-free.  

“Investing in AI, and the skills and training to make use of it, are essential. It is also crucial that supportive supply chains and regulatory frameworks are put in place to promote AI-enabling industries. This includes sectors such as semiconductors, data and energy, only then can the potential set out in the World Trade Report become an economic reality.” 

The full WTO World Trade Report can be found here. 

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“The first month of reduced automotive tariffs has had a positive effect on US exports alongside more certainty on the outlook for other manufactured goods sectors.

“But far more work is needed on US tariffs. That means delivering the promised zero percent tariffs on steel and aluminium goods, long term certainty for pharmaceuticals, and securing lower levies on other goods if possible.

“The performance of our trade in goods with the EU continued its recent upward trend but the UK-EU reset negotiations need to deliver quickly. Firms are clamouring for cuts to red tape and lower compliance costs.

“There is also a warning in the data as services exports cooled off in July reflecting business concerns about wider economic headwinds. The government needs to focus on the fundamentals to boost UK trade.

“That means lowering tariffs, removing regulatory barriers, boosting supply chain cooperation, and improving access to export support and finance. The faster, simpler and cheaper trade is for UK companies, the higher our exports will be.”

Goods Exports

The volume of goods exports rose in July by 5.2%, with EU sales up by 1.4%, led by car exports. and non-EU exports up by 9.3%.

UK exports in goods to the US rose by £0.8bn in July, a 20.5% rise month on month,  but remain significantly below pre-April levels when most new tariffs were applied. Cars, fuels and industrial goods saw big increases in sales.

Goods Imports

On goods imports, there was an increase of 4.1% in the volume of imports from the EU and 3.7% from the rest of the world.

Services

Exports were unable to sustain recent stable growth with a drop in volumes of 0.4% during July, while services imports were flat.

More detail on the ONS data can be found here.

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“A strong agri-food deal will remove costs, red tape and delays for UK businesses trading in food and plant products with the European Union.  

“Firms have spent staggering £60m a year on export health certificates since 2021. Removing these costs will reduce inflationary pressures and make supply chains more secure. 

“A permanent deal with the EU can’t come soon enough for UK firms. In the talks ahead ministers must deliver a deal that truly unburdens business and cuts costs. Consumers will then reap the benefits in their shopping baskets.  

“Making trade with the EU quicker, cheaper and simpler is crucial to boosting economic growth in the years ahead.”

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“Tariff effects are clearly being felt by companies exporting to the US. Total goods exports across the Atlantic for Q2 2025 were 13.5% lower than a year ago.

“But the UK’s performance is not all bleak, with strong services exports across the second quarter.

“Overall, goods exports showed a Jekyll and Hyde character, with non-EU goods exports badly hit, while goods exports to the EU (nearly half of the UK’s total goods exports) were higher across the quarter.

“This was the first full quarter of the ‘reciprocal’ US tariffs, which add an extra 10% to most UK sectors, from food and drink to chemicals. The effect of these higher costs is becoming clear, with the lowest levels of goods exports to the US for 3 years.

“Implementation of the UK’s trade deal with the US in full is now needed to improve prospects, particularly for steel and aluminium goods.

“The agreement should be a platform to discuss further tariff reform with the US, especially in goods sectors where there is little competition on production.

“We also need Ministers to focus on implementing those areas of the Trade Strategy which can boost goods export sales and growth at pace, while sustaining the rate of progress in services trade.”

Goods Exports

UK goods exports declined in June 2025 by 6.1% in volume compared with May.

Goods exports to the EU fell by 2.1% and to non-EU trade partners by 10.2%.

Comparing UK goods exports in Q2 to the US with the same quarter a year ago, sales were £2bn lower on non-seasonally adjusted data. A drop of 13.5% year-on-year by quarter.

Across Q2 2025 as a whole, UK goods exports fell in value terms by 3.7%. Goods exports to the EU rose by 3.6% over that period, but for the rest of the world they fell by 9.9% across a whole range of material manufactured products.

On exports to the EU across the quarter, power generators and ships exports performed strongly.

US Tariff Changes in Q2

Reciprocal tariffs across most UK goods exports sectors to the US came into effect in early April. Q2 is therefore the first quarter where most UK goods were affected. Steel and aluminium product tariffs at 25% have applied since March.

Tariffs of 10% on automotive vehicles and automotive parts for UK vehicles in the US, and zero tariffs for civil aerospace vehicles and parts came into effect from 30 June 2025. There are also now 50% tariffs for certain copper exports.

Goods Imports

The volume of UK goods imports fell by 3.6% in June. This was made up of a 5.7% drop in EU goods imports, and 1.5% fall from the rest of the world.

For Q2 as a whole, total goods imports to the UK rose by 1.6%, in value terms, with imports from the EU 3.1% higher on the quarter and non-EU goods imports flat.

Chemicals and machinery/transport equipment imports from the EU performed strongly in Q2 2025.

Services

In services, UK exports fell by 0.2% in June but across the last quarter experienced strong growth at 2.9%. This was particularly pronounced in professional and advisory and other business services, financial services and travel services.

Services imports rose by 1% during June, but across the quarter as a whole fell slightly by 0.2% with drops in travel services, pensions and insurance imports.

More detail on the ONS data can be found here.

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 “This development has been coming for several months but is still a major blow to UK exporters to the US. Smaller firms and sole traders, who have invested strongly in e-commerce sales internationally, will be worst hit.  

 “But the UK is in a comparatively advantageous position in terms of these additional duties compared with those faced by other countries.  

 “The EU is also likely to scrap its de minimis threshold by 2028, and the UK government is launching a review into removing the threshold here too.  

 “There are still great opportunities, both in the US market and other markets globally for UK goods, but SMEs will need to rethink their sales and distribution plans to deal with these added duties.  

 “The Chamber Network in the UK, and internationally, can provide the best advice, alongside the logistics industry, to overcome these challenges and sustain export growth. 

 “Action on the government’s new trade strategy is now also more urgent. Exporters to the US, particularly SMEs and sole traders, will need additional support and advice to deal with the disruption and added costs these de minimis threshold changes will cause.” 

 Under the Executive Order issued by the President, duties will be payable on goods valued under $800 from August 29. These will be in line with the rates applied to other goods from each country in accordance with its tariff rates.  

 For most UK goods export sectors this means the tariff rate they used to have plus the additional 10% reciprocal rate applied to most UK goods since April.  

 Alternatively, for the first six months only, a specific rate of $80 per item would apply to low value packages from the UK entering the US. After that period the duties described above will be enforced on all packages of UK origin in scope.  

 More detail on the US changes to de minimis thresholds can be found here. 

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 “Firms have been patiently waiting for signs of progress on the EU reset and will be pleased to finally see this movement. 

 “Negotiations on removing red tape for cross border trade in food and plant products, and on carbon charges are two key areas which can reduce business costs.  

 “The sooner we can reach agreement the quicker we can expand bilateral trade and reduce the bureaucracy and charges involved. 

 “We are also encouraged by the intention to remove ‘not for EU’ labelling on products circulating in Northern Ireland through amendments to the Windsor Framework.  

 “Plans to link the UK and EU Emission Trading Schemes will also reduce compliance costs for traders and provide greater liquidity for energy markets and investment. 

 “The UK has its own mandate processes to complete, but we are hopeful that formal negotiations can now begin in early autumn. 

 “Businesses will want both sides to move at pace so they can see the benefits of faster economic growth and additional trade at the earliest opportunity. A win-win agreement for companies in the UK and Europe is a prize we must all remain focused on delivering.” 

 More details on the EU mandate for negotiations can be found here. 

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“This deal will be met with a huge sigh of relief by many British businesses.

“The reduction in the 25% tariffs on most of our automotive exports and the removal of levies on steel and aluminium are the biggest wins.

“These sectors had been left reeling as jobs, investment and sales were all cut or put on hold. This framework agreement will give them some much needed certainty. They will be keen to see it quickly enacted so they can swiftly re-establish orders and supply chains.

“The news on aerospace, including jet engines is also good news, as is additional protection from tariffs on our pharmaceutical sector.

“But this must not be the end of the process; we must continue to push the argument for free and fair trade across all economic sectors and that tariffs are a lose-lose position.

“The commitment to pursue a digital trade deal and make commerce easier in the future is also a worthy ambition.

“Our bilateral trade is already worth £300bn, we have £500bn invested in the US and it has £700bn of investment stock in our economy.

“There is a high-level of co-dependency in our economic relationship, and it is in both our interests to continue building upon those strong foundations which have developed over decades.

“Following on from the India trade deal, the government should be congratulated on what it has achieved this week, but our economy still needs more.

“Global trading conditions remain precarious. There must be a bold reset agenda with the EU to reduce trade costs, and it must help UK companies seize the opportunities in the fast-growing Indo-Pacific region.”

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