In July 2024, the UK saw a new government elected with a mission to place a stronger emphasis on economic growth and to “reset” relations with the European Union. Internationally, the global trading environment is becoming more volatile, characterised by fast-moving geopolitical developments, shifts in international supply chains and a more widespread adoption of trade protectionism. The economic, trade and foreign policy tensions between the incoming US administration, China and other countries may provide a further challenge for businesses operating in an already sensitive commercial environment. 

As this survey has demonstrated since its inception, UK businesses have shown resilience in challenging circumstances: adapting to Brexit, the Covid-19 pandemic, a fast-moving external environment and shifts in domestic policy priorities.
 

Executive Summary
 

1. Businesses are adjusting to the new terms of trade with Europe and are showing signs of positivity about the future.

• Brexit-related trade losses have largely stabilised, with 57% of businesses reporting a decline in trade with the EU, compared to 74% of businesses two years ago.
• Optimism about the future of the UK-EU relationship is growing, particularly in light of the UK government’s intention to ‘reset’ relations with the EU and the forthcoming review of the UK-EU Trade & Cooperation Agreement.
• Most business leaders believe the UK should undertake some form of alignment with EU rules, but are divided on how much regulatory autonomy the UK should retain.

2. Businesses are increasingly concerned about global trade barriers and are exploring strategies to mitigate for higher costs.

• High tariffs and taxes on trading are a growing concern for businesses trading in every major region of the global economy.
• The vast majority of businesses are actively seeking to mitigate the impact of higher tariff barriers, including by raising prices, exporting to alternative markets and relocating production.
• Despite rising global trade barriers, most business leaders anticipate China playing an even larger role in their supply chains over the years ahead.
  

3. Business leaders are increasingly positive about the UK’s trade policy and its economic impact, but more can be done to help businesses utilise the benefits of trade agreements.

• Business leaders have strong and growing confidence in the UK’s trade agreement programme, with a clear majority (61%) of business leaders considering it of benefit to their business, and 71% believing it to have a positive impact on economic growth. 
• There was a notable increase in support for the UK’s accession to CPTPP and a new FTA with the Gulf Cooperation Council.
• By a significant margin, business leaders prefer comprehensive FTAs over bespoke sectoral agreements, but believe there is considerable room to improve their utilisation, including by striking better terms for services suppliers and providing greater support for participation in trade shows.
• For the third year running, we saw an increase in business leaders’ approval of how well the UK government is communicating the benefits of trade agreements, and more businesses are frequently engaging with government about trade policy.
  

For further information please contact tradesupport@deloitte.co.uk or
one of our named specialists below.