Chancellor Rachel Reeves has announced decisive action to protect UK businesses, particularly those in the retail sector, from the growing threat of unfair international trade practices, including the influx of artificially cheap imports.
This move marks a key step in the government’s wider programme of economic reform. The Chancellor reaffirmed her commitment to promoting open and fair trade, emphasising that while global trade is vital for long-term economic growth, it must not come at the expense of British businesses. Retailers, in particular, have been placed under mounting pressure by overseas competitors able to exploit legal and tax loopholes.
Retailers on the front line: Creating a fair competitive environment
UK retailers have been among the most affected by unfair international pricing practices. From fashion and homeware to consumer electronics and e-commerce, many face growing difficulty competing with international sellers who avoid import duties and undercut prices.
To address this, the government is strengthening the role of the Trade Remedies Authority (TRA)—the UK body tasked with defending domestic industries against unfair trading practices. The TRA will receive additional resources and broader powers to take quicker action to protect British businesses from underpriced imports that distort competition and threaten jobs in the retail supply chain.
With global trade tensions rising, particularly between the United States and China, this comes at a crucial time. William Bain, Head of Trade Policy at the British Chambers of Commerce, noted:
“There are still many twists and turns to go in the trade war between the US and China. It is sensible for the TRA to have all the necessary tools and resources to take action to prevent the UK being swamped with unfairly cheap products.”
Reviewing the low value imports regime:
A welcome move for UK Retailers
The Chancellor also confirmed a review of the Low Value Imports regime, which currently allows goods valued at £135 or less to enter the UK without customs duties. This has been a source of deep frustration for UK retailers, who argue that it gives an unfair advantage to overseas sellers able to avoid tariffs and deliver directly to British consumers at significantly lower prices.
The system has been particularly detrimental to small and medium-sized retailers that operate entirely within the UK, and are subject to full VAT, customs, and regulatory compliance. By reviewing this policy, the government aims to establish a more balanced and competitive retail environment.
Initial engagement with stakeholders is already underway to ensure any changes reflect the needs of the UK retail community and support long-term growth.
What this means for the UK retail sector
These developments signal a significant shift in trade policy and could be transformative for the retail sector. Retailers should be prepared for changes that may include:
- UK fulfilment providers and B2B supply chain partners may benefit as retailers shift from international drop-shipping to domestic logistics solutions.
- A stronger safeguard against underpriced imports and distorted competition
- A more level tax and regulatory playing field with overseas sellers
- Increased confidence to invest in UK-based operations and supply chains
- Enhanced government backing during global economic uncertainty
Supporting retailers through change
At Menzies LLP, we recognise the complex challenges facing retailers in a rapidly evolving trade landscape. These policy changes could impact everything from pricing strategy and procurement models to tax obligations and customer relationships.
Our business advisory and tax teams are on hand to help you understand how this policy shift may affect your business and how best to adapt. Whether you are reviewing your supply chain, revisiting pricing, or planning for growth, we can provide tailored guidance to support your next steps.
Get in touch with your Menzies adviser or reach out to Martin Hamilton to start a conversation about how to future-proof your retail business amid changing global trade dynamics.
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