35. Policy Watch

Global  

While the recent US trade agreements do not directly impact trade between England and Sweden, there is a profound indirect impact. This can be observed through the changes in the regulatory standards, competitive landscape, and strategic values within the transatlantic market. The differential US trade deals between the UK and Sweden (as an integrated EU member) create a newfound friction and asymmetry between the countries.  

The ongoing US-EU trade deliberations seem to benefit Sweden in several ways, with major Swedish exports such as Volvo, Ericson and H&M being subject to a more stable framework that protects against any arbitrary tariff impositions as well as establishing more supply chain security with mineral deals that allow for transition into their ambitious green industrial plans (Eg, battery production and EVs). 

The UK’s pursuit of a US trade deal has highlighted extreme vulnerabilities, as exemplified by the struggles of its bioethanol industry. A future deal that allows subsidised US bioethanol to enter tariff-free could prioritise market access over domestic industries, as feared after the closure of plants like Vivergo, which have ceased production and are getting ready to lay off their 160 employees (according to the BBC). This further undermines any competitive advantage the UK may have. 

The policy divergence actively undermines the Anglo-Swedish relationship and may hurt trade between the countries. Manufacturers may face costly rules of origin checks; for instance, a UK engine containing Swedish steel may lose its tariff-free access to the US under a future bilateral deal as its components are no longer considered “local”. Furthermore, UK regulatory alignment with US standards on everything from chlorinated chicken to chemical safety would violate its agreement with the EU. This would instantly create non-tariff barriers, blocking Swedish food, electronics and machinery from UK markets and fracturing existing supply chains. 

Local 

The UK Product Regulation & Metrology Act 2025 has had large implications on the extent to which green product rules can now align with the EU. The Act received Royal Assent, giving ministers broad powers to set/modernise product requirements (safety, eco/energy performance, online marketplace duties, AI-in-products, repairability, metrology). According to the UK’s legislation database, it enables the UK to mirror or integrate with EU-style environmental/product standards where desired. Sweden (as an EU member) will adopt EU environmental product rules. With the UK now able to align, UK exporters can design fewer times and sell into Sweden/EU with fewer adjustments. 

Additionally, HM Treasury set out a Growth & Competitiveness Strategy, signalling targeted deregulation and pro-investment reforms. This signifies a shift toward faster approvals, clearer responsibilities, and relief for smaller firms, reducing time-to-market and compliance drag for banks, fintech and payments. With Sweden being the hotbed for fintech that it is, this is significant for UK firms looking to deploy capital into Nordic scale-ups. This can allow for the passporting of talent and products more efficiently into Sweden via EU subsidiaries, while keeping their centre in London. For Swedish institutions operating in the UK, lighter frictions can lower costs of expansion. 

Ultimately, the Product Regulation & Metrology Act and the financial-services reforms mark a shift toward smoother UK-EU/Sweden trade. The product law allows the UK to align more closely with EU environmental standards, cutting compliance costs for exporters and easing Swedish market entry. At the same time, financial deregulation lowers barriers to raising capital and speeds approvals, positioning London as a stronger hub for funding and scaling sustainable businesses that can then expand intro Sweden’s economy. 

Review 

Amid shifting US, UK, and EU trade dynamics, members of the British-Swedish Chamber of Commerce face both risks and new opportunities. 

The ongoing US trade deals are both solidifying and hindering Anglo-Swedish trade with large dynamic shifts along many industries, from bioethanol to steel. The uncertainty of future trade allows for innovation and strategic pivots, assuming the avoidance of any rules of origin checks and regulatory alignment issues. Companies that proactively adapt their supply chains and investment strategies can turn this regulatory divergence into a competitive advantage. 

The Product Regulation & Metrology Act allows closer EU alignment, which is designed for EU standards first, cutting compliance costs and easing UK-Sweden trade for member companies. As such, prioritising EU regulatory alignment may benefit companies seeking to operate in both the UK and Sweden. UK capital can fuel Swedish industry, while Swedish firms gain cheaper UK expansion as a result of deregulation.