Recent shifts toward protectionist trade policies—most notably from the United States—are reshaping the global trading system in ways that extend beyond traditional economic concerns. Protectionism refers to when countries introduce measures such as tariffs, quotas, or subsidies to limit imports and support their domestic industries. For the UK, navigating this uncertainty comes at the post-Brexit period, where trade resilience, food system stability, and climate commitments are increasingly intertwined. In this blog, we explore how these shifts—both escalating tensions and cautious diplomatic steps—are shaping UK trade relationships, food and agricultural markets, climate ambitions, and the future of multilateral cooperation. Drawing from current data, recent events and policy updates, we examine what these developments mean for UK policymakers, businesses, and the wider global economy.

The return of retaliatory tariffs

The escalation of tariffs between major economies like the US, China, and the EU has reignited a wave of protectionism—reversing decades of progress made under the Uruguay Round Agreement, which aimed to reduce global trade barriers. Following that agreement, trade tensions gradually eased, and the global trading system experienced a period of relative stability. However, this trajectory sharply reversed in April 2025, when the US reimposed steep tariffs on a wide range of trading partners—most notably on Chinese imports, which faced duties of up to 145%. In retaliation, China imposed tariffs as high as 125% on US goods. Similar patterns have emerged in US-EU and US-UK trade relations, though the UK has largely avoided direct retaliation.

A recent development offers a temporary pause: starting 14 May, the US will reduce tariffs on Chinese imports to 30%, while China will lower its tariffs on US goods to 10%, both for a 90-day period. According to the World Trade Organization (WTO), this move has “temporarily relieved some of the pressure on global trade.” Yet, it remains uncertain whether this pause will pave the way for lasting improvements in trade relations or simply delay the next round of escalation.

In our view, this kind of back-and-forth has weakened the authority of the WTO, which was long regarded as the backbone of stable multilateral trade. Instead of resolving disputes through cooperative negotiation, countries are increasingly turning to unilateral policy changes. For sectors like agriculture and food—where businesses rely on predictable rules and long-term trade relationships—this instability can be especially damaging.

Uncertainty for UK businesses and the food sector

The unpredictability of tariff policies has significantly increased economic uncertainty. Businesses that invest in overseas markets—particularly small and medium-sized enterprises—require a stable environment to plan, grow, and adapt. The sudden introduction of tariffs can disrupt investment decisions, delay expansion plans, and reduce overall competitiveness.

In the UK, the food and agriculture sectors are particularly sensitive to trade disruptions. Around 67% of UK agri-food exports go to the European Union, and 70% of agri-food imports originate from the EU. Although the US accounts for a smaller share—about 6% of agri-food exports and 2% of imports—it remains a high-value market, especially for niche and specialty products. Any new barriers to trade with the US, even indirectly through global value chain effects, can significantly affect the UK food sector.

In light of these persistent uncertainties, the UK has begun recalibrating its post-Brexit trade strategy—moving from caution to more proactive engagement.

Post-Brexit trade strategy:  From caution to deeper engagement

Since Brexit, the UK has taken a measured, non-retaliatory approach to trade tensions—particularly with the US—prioritising negotiation over escalation. This stance helped protect key sectors like food and agriculture from disruptive tariff hikes.

Now, the UK is moving from caution to deeper engagement. On 8 May, the White House announced plans for a new Economic Prosperity Deal (EPD) with the UK. The deal aims to expand trade, reduce tariffs in priority sectors such as beef, ethanol, and automotive goods, and improve regulatory cooperation. It also emphasises easing non-tariff barriers, particularly in agriculture, while safeguarding sanitary and phytosanitary standards.

This shift signals the UK’s evolving post-Brexit strategy—seeking stable, reciprocal partnerships through diplomacy and targeted market access, rather than confrontation. It’s a model that may resonate with other mid-sized economies navigating today’s uncertain trade landscape.

Broader consequences for international cooperation

Trade policy is no longer just about economics—it has profound implications for global climate action and other international cooperation initiatives (e.g., poverty). In the short term, global trade tensions may reduce emissions by slowing economic activity. But this is not a sustainable climate solution. The long-term risks are far more serious:

• Rising costs for renewable technologies: Tariffs on solar panels, batteries, or related components can raise the cost of clean energy, deterring adoption.
• Shifting priorities: Governments facing economic uncertainty may deprioritise investment in green technologies, focusing instead on protecting domestic industries.
• Increased emissions from domestic inefficiencies: Protectionist policies may incentivise domestic production in sectors where countries lack comparative advantage, leading to less efficient and more emissions-intensive output.
• Undermining global cooperation: Trade wars erode trust and forums like the WTO, which may affect sustainable trade and climate mitigation strategies.

For the food sector, these trends are particularly troubling. Global food production and distribution depend heavily on cross-border trade. Disruptions may not only affect availability and prices but also push countries to revert to more resource-intensive domestic systems, increasing the carbon footprint of agriculture.

A way forward: policy recommendations

To safeguard against the growing risks posed by trade wars, UK policymakers must take a proactive stance. This includes:

• Supporting businesses with timely information and guidance: Especially for small and medium-sized food exporters, accessible and up-to-date market intelligence is critical for navigating uncertainty and identifying new market openings, such as those emerging from the UK–US Economic Prosperity Deal.
• Engaging in strategic trade negotiations: The UK should continue to pursue deals that protect key sectors like agriculture while maintaining the flexibility to respond to global shocks.
• Strengthening the multilateral trade system: As a middle power, the UK has a vested interest in upholding global trade rules. A robust WTO benefits smaller economies that rely on fair and transparent systems.
• Investing in climate-smart trade resilience: Incentivising energy-efficient food production, reducing food miles, and supporting sustainable export practices will help the UK align trade policy with climate goals.

Conclusion

Tariff-based protectionism seems to be back on the global stage, bringing with it uncertainty, inefficiency, and a host of long-term risks. Although recent developments—such as the temporary US–China tariff pause and the UK–US Economic Prosperity Deal—suggest some diplomatic momentum, these shifts remain tentative and fragile.  For UK businesses, especially in the food and agriculture sectors, the stakes are high. Global trade volatility directly affects market access, investment confidence, and long-term resilience. These pressures also risk undermining the coordinated international efforts needed to address climate change.

For the UK, navigating this complex landscape will require a mix of strategic diplomacy, robust domestic support for affected sectors, particularly food and agriculture, and a renewed commitment to climate-responsible trade. The intersection of food, trade, and climate is no longer a matter of future planning—it is the battleground of today’s policy decisions.

Further information: Opportunities for Scottish food industries in existing and new markets | SEFARI

Thank you to Cesar Revoredo-Giha and Shashika D. Rathnayaka for this blog.

Lead Image: Markus Winkler, Unsplash