We are living in a geopolitical world. While states may cloak their actions in legal justifications or economic reasoning, trade has become a tool to assert power, control narratives, and forge alliances. Trade deals are being designed to reduce vulnerabilities, not barriers.

The recently announced US-UK deal is not a traditional trade agreement but a ‘geopolitical’ deal strongly reflecting the US’s geopolitical rivalry against China. Lacking the legally binding nature of international agreements, the deal sidesteps legal frameworks and instead stakes its importance on strategic alignment. As such, it signals a broader shift in how the US, which has its global leadership threatened by the rise of China as a superpower, now uses trade policy: not as a matter of market efficiency or legal commitments, but as an instrument of geopolitical influence and national security. Furthermore, the deal clearly shows the second Trump administration’s strong intention to force trade partners to collude with the US to squeeze China from global supply chains.

Securitising supply chains

At face value, the deal includes a few economic concessions, conditional on fulfilling security-related requirements. For example, the US has agreed to reduce tariffs on British steel, aluminium, and automobiles. In return, the UK will work toward aligning its steel supply chain with US national security requirements. Although these security standards are unspecified, their inclusion reflects a broader trend in which trade policy is being securitised. More importantly, the commitment to vague ‘shared national security priorities’ and ‘supply chains security requirements’, which strongly reflect the US’s geostrategic interests, signals a departure from the traditional rules-based trade. This approach does not contribute to restoring a predictable, stable and fair international trading system.

The deal’s language around ‘supply chain security’ reveals a more ambitious strategy to decouple world economies from Chinese investments and manufacturing dominance. During the Biden administration, the US promoted ‘resilient supply chains’ to reduce trade dependency on China by using industrial policies (e.g. the CHIPs and Science Act and the Inflation Reduction Act) and pushed homeshoring and friendshoring. At the international level, the Biden administration tried to institutionalise the US-led ‘resilient’ supply chain coalition by creating the Indo-Pacific Economic Framework (IPEF) Supply Chain Agreement with its allies. The US-UK deal refers to ‘security of supply chains’ without using ‘resilience’ of supply chains. This indicates the Trump administration’s strong will to use bilateral trade deals as part of the US’s national security toolkit. For Trump 2.0, national security is a source of power to contest China. As envisaged in the US-UK deal, the scope of the ‘security of supply chains’ is potentially expanded to other sectors (see 1. (c) (iv)). Securitisation of everything is Trump 2.0’s strategy to accumulate power.

Implications for the UK and the rest of the world

What does the deal mean for the UK? The main issue concerns the UK’s trade strategy, which the government has yet to publish. The US-UK deal suggests a shift from traditional free trade agreements (FTAs) toward more strategic partnerships and flexible trade instruments. The UK may be playing both sides of the fence since the UK-India FTA was announced just two days before the US deal. However, the UK-India FTA seems to emerge from a different context, more closely linked to post-Brexit efforts, highlighting the dynamic changes. This new UK position may conflict with its long-standing support for the multilateral trading system and rules-based cooperation by undermining the WTO principles of non-discrimination and transparency. It can also raise issues regarding treaty scrutiny and, consequently, democratic accountability.

The US-UK deal also affects the rest of the world. It creates a bad precedent for countries currently negotiating or in the queue to negotiate a bilateral deal with the US. Even the UK, which is relatively in a better position in terms of its trade balance with the US, ended up with shallow and narrow concessions that included strong – though unspecified – national security requirements. This means countries that have more trade surplus with the US and stronger supply chain relations with China, such as Southeast Asian countries, Japan and South Korea, will have to concede more, with developing countries likely to bear the highest costs.

We underline two main points from the US-UK deal that will impact the UK and other countries if they accept the same deal template. The first concerns a diplomatic balance between the US and China. For example, the British economy remains heavily intertwined with China, as it is the UK’s 5^th largest trading partner. Any serious attempt to meet US security criteria for supply chains would likely demand either a significant restructuring of British trade relationships or selective exemptions that would undermine the stated purpose of security.

Secondly, the deal raises questions about how rules of origin will be defined and enforced. How will any government verify the integrity of its supply chains without formalised and enforceable frameworks? Even if the parties agree on these details later, these unresolved technicalities reflect the underlying truth of the deal: its function is geopolitical, not economic.

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