A Cautious Welcome for the UK-EU Trade Reset – and What It Means for Business

The recent UK-EU summit held at Lancaster House on 19 May 2025 marked a significant moment in the evolving relationship between the United Kingdom and the European Union. Five years on since the UK left the EU, this summit has delivered a suite of new agreements that, while not reversing the UK’s departure from the EU, represent a pragmatic step forward in rebuilding economic and political ties.

The newly signed trade framework is particularly welcome. It addresses several long-standing frictions that have hampered UK-EU commerce since the end of the transition period. Most notably, the agreement introduces a new sanitary and phytosanitary (SPS) protocol, which will eliminate the majority of routine checks on food, drink, and agricultural products crossing the UK-EU border.

This is expected to ease the burden on exporters and importers alike, reduce costs, and ultimately benefit consumers through greater product availability and potentially lower prices.

In addition, the deal provides relief for the UK’s steel industry by waiving new EU tariffs, a move projected to save the sector approximately £25 million annually.

These are tangible benefits that should not be underestimated, especially for SMEs – some of which have struggled with the complexities of post-Brexit trade.

The agreement also extends EU fishing access to UK waters until 2038, a politically sensitive concession that has drawn criticism from some quarters. 

However, this was part of a broader compromise that includes improved access for UK businesses to EU markets and a new security pact that could see the UK participate in EU defence funding initiatives.

It is important to note that this agreement does not signal a return to the customs union or single market. Rather, it reflects a mutual recognition that closer cooperation is in both parties’ interests, particularly in a volatile global environment.

This summit follows closely on the heels of two other major trade developments: the UK’s bilateral agreements with the United States and India, both signed earlier this month. The US deal focuses on digital trade and services, while the Indian agreement opens up new opportunities in pharmaceuticals, technology, and education. Together, these deals form part of a broader strategy to diversify the UK’s trade relationships and reduce over-reliance on any single market.

From a business perspective, these developments are encouraging. They suggest a more stable and predictable trading environment, which is essential for long-term investment and growth. However, caution is warranted. Much will depend on the implementation of these agreements and the political will to maintain constructive dialogue on both sides.

At Irwin Mitchell, we continue to advise clients navigating the complexities of international trade. While the path ahead remains uncertain in many respects, the recent agreements offer a more optimistic outlook for UK businesses seeking to grow and compete globally.

Irwin Mitchell recently published its latest FDI report The in-depth study includes an introduction from Baroness Gustafsson, insights on the UK’s advanced manufacturing sector by Simon Collingwood, a case study on Freeports by Calum Macpherson, and expertise from legal professionals on how FDI projects can create jobs and drive innovation.

You can hear more about how the UK is attracting FDI in the new season of our Business But Better podcast. We’re joined by industry experts to explore the unique advantages available to overseas investors, how the government is prioritising FDI, and the help available when entering the UK market.