37. Policy Watch
Global
With the ongoing US deals, the differential treatment of countries is constantly changing the landscape of international trade. This week, we will focus on the differing nature of tariffs imposed on the UK and EU by the US, with them either being stacked on top of or replacing pre-existing tariffs.
UK
The US-UK Economic Prosperity Agreement utilises a "stacked tariff" system where a new 10% reciprocal tariff is added to existing Most-Favoured Nation (MFN) rates. This means UK exporters face cumulative duties. For example, luxury textiles subject to a 35% MFN rate now incur a 45% total tariff.
EU
In contrast, the US-EU Framework Agreement establishes a 15% tariff ceiling that replaces rather than stacks upon MFN rates. According to official EU communications and US trade documents, this means EU exporters pay at most 15% regardless of underlying MFN rates, providing more predictable market access. This structural difference creates competitive imbalances, particularly affecting UK exporters in high-tariff sectors.
Potential issues
These developments may affect integrated supply chains. UK manufacturers incorporating Swedish components could lose preferential US market access under stricter rules of origin. For example, goods produced with Swedish steel or aluminium may face higher tariffs due to the goods not being considered “local”. Additionally, UK regulatory alignment with US standards may introduce non-tariff barriers for EU goods entering the UK market.
Local
Recent EU digital and AI regulations are rapidly evolving, creating important compliance and business implications for UK companies operating in Sweden and across the EU.
EU AI Act
In August 2025, the EU’s AI Act took effect, activating new obligations for e AI models and establishing the AI Office and AI Board to oversee compliance. Providers must now publish transparency documentation, with penalties of up to 7% of global turnover for violations. Sweden has been aligning its national law and guidance with these EU rules. The AI Act will operate alongside the GDPR, and Sweden is currently conducting a national review to determine whether any local adaptations are necessary due to the AI Act, with findings expected no later than 30 September 2025.
EU Data Act
The EU Data Act is scheduled to come into effect on 12 September 2025, requiring manufacturers of connected devices to provide users access to their data and banning unfair lock-in clauses. The Data Act requires that Member States complement the act with national laws and more local regulations. For Sweden, national enforcement rules will be notified by the same date, meaning Swedish authorities can sanction non-compliance locally. UK companies selling connected devices or digital services in Sweden or across the EU will have to update contracts, IT systems, and data-handling processes.
Review
The EU AI Act, Data Act, DSA, and DMA are moving into active enforcement, creating immediate compliance obligations for companies operating in Sweden and the broader EU.
Companies that act proactively can mitigate financial and reputational risks while positioning themselves to take advantage of new opportunities in data access, AI deployment, and digital services.