Welcome to the August BABN Policy and Trade Update.

July brought a significant change in UK politics, with Andy Burnham succeeding Keir Starmer as Prime Minister and moving quickly to reshape both his cabinet and the machinery of government - including the abolition of the Department for Science, Innovation and Technology and an early focus on cost-of-living measures.

On the trade side, the US Trade Representative brought into effect new Section 301 tariffs on goods linked to forced labour as the temporary Section 122 duties expired, with the UK placed in the lowest tariff band. The change marks a further evolution in US trade policy and a continued reminder of the importance for BAB and partners to advocate for stability and predictability for transatlantic business.

This period has also been a busy one for BAB's work on behalf of the Network. We published a new paper making the case for UK technology sovereignty through deeper transatlantic partnership, alongside a joint report with EY highlighting six key trends shaping UK-US bilateral investment. We also announced the winners of our 2026 Transatlantic Growth Awards.

See below for a breakdown of policy and trade headlines and our published works.

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Andy Burnham Becomes Prime Minister

20 July 2026

What happened: Andy Burnham succeeded Keir Starmer as UK Prime Minister on 20 July, following Starmer's resignation as Labour leader. A former Mayor of Greater Manchester and a cabinet minister under Blair and Brown, Burnham returned to Parliament as MP for Makerfield shortly before taking office. In forming his cabinet, he appointed John Healey as Chancellor of the Exchequer, Ed Miliband as Foreign Secretary, and retained Shabana Mahmood as Home Secretary, with Jonathan Reynolds as Business Secretary.

First decisions: On his first full day, Burnham announced a VAT cut on domestic electricity bills from October and confirmed that the previous government's digital ID plans would be scrapped. In a machinery-of-government reshuffle, the Department for Science, Innovation and Technology (DSIT) was abolished and its functions redistributed: business, science and innovation to a renamed Department for Business, Innovation, Science and Trade (DBIST); digital, online safety and cyber to an expanded DCMS; and AI to the centre of government, with a AI Minister Kanishka Narayan now attending Cabinet.

Looking ahead: Burnham has committed to existing borrowing limits and fiscal discipline, indicating broad continuity on economic strategy alongside a stronger focus on regional investment. A second UK-EU summit, postponed following the change in leadership, is expected to be rescheduled to finalise agreements on agri-food checks, emissions-trading linkage and a youth mobility scheme. He has described the US relationship as "critical" and signalled fewer overseas visits than his predecessor. For BAB members, the areas to watch are the structure of the new DBIST, the UK's approach to US and European technology partnerships, and the trajectory of the EPD under the new government.

USTR Imposes Section 301 Forced Labour Tariffs as Section 122 Duties Expire

24 June 2026

Overview: The US Trade Representative brought into effect new Section 301 tariffs of 10-12.5% on goods from more than 60 economies, including the United Kingdom, replacing the Section 122 duties that expired the same day. The measures cap a sequence of tariff actions this year: after the Supreme Court ruled in February that the International Emergency Economic Powers Act (IEEPA) did not authorise the President to impose tariffs, the administration introduced a temporary Section 122 surcharge as a 150-day bridge from 24 February, and has now moved to Section 301 as that authority lapsed.

How they work: The action follows USTR investigations, initiated on 12 March, that established a failure of 60 economies to impose and effectively enforce a prohibition on the importation of goods produced with forced labour. USTR determined that this failure is "unreasonable and burdens or restricts US commerce" and is therefore actionable under Section 301(b). Rates are tiered by each economy's compliance posture: a 10% rate for a first group that includes the UK, Canada, Mexico, India and Bangladesh; a rate of 10% or 12.5%, net of the Most-Favoured-Nation (MFN) rate, for the EU, Japan, Korea, Taiwan and Switzerland; and 12.5% for the remaining 38 economies, including China and Brazil. USMCA-qualifying goods and certain CAFTA-DR textiles and apparel are exempt, alongside a separate textile mechanism, tariff-rate quotas for a small number of economies, and product-specific carve-outs set out in the annexes. The UK sits in the lowest 10% band.

Looking ahead: A further Section 301 announcement on proposed "excess capacity" rates is expected soon, with possible implementation in mid-September. More broadly, the move confirms Section 301 as the administration's principal tariff vehicle following the IEEPA ruling.

New BAB Publication: UK Tech Sovereignty Paper

28 July 2026

Overview: BAB published Strength in Partnership: UK Tech Sovereignty and the Case for a Deeper Transatlantic Digital Alliance, arguing that the UK should pursue technology sovereignty through openness, trusted partnerships and targeted domestic investment. Drawing on input from leading US and UK technology companies, the report frames the presence of US technology firms across the UK economy as a strategic asset rather than a vulnerability, and cautions that seeking total independence across every layer of the technology stack would be neither financially realistic nor strategically desirable given the global nature of the AI supply chain.

Dive deeper: The report reframes sovereignty as the ability to make deliberate choices about the systems on which the UK depends, rather than a binary between dependence and independence. It calls on the UK government to identify the narrow set of systems that require the highest assurance while treating openness to trusted providers as the default elsewhere. Through nine recommendations, it sets out three priorities: elevating key elements of the Technology Prosperity Deal into a legally binding bilateral agreement covering compute access, non-interruption clauses for critical services and cross-border data flows, including a strengthened UK-US Data Bridge; making interoperability, data portability and audit rights standard conditions in public-sector procurement, alongside joint UK-US leadership on international AI standards; and accelerating domestic enablers such as energy supply, planning and grid connections.

Looking ahead: The report argues that partnership needs firmer foundations, noting that the suspension of the Technology Prosperity Deal within three months of signature showed how quickly arrangements resting on political goodwill can unravel. It positions binding commitments and regulatory alignment as the basis for sustained confidence among businesses on both sides of the Atlantic.

Read more: You can read our full publication here and our press release here.

New BAB/EY Research: UK-US Bilateral Investment Report

6 July 2026

Overview: BAB, in partnership with EY, published The special investment relationship: the deepening value of UK-US FDI, finding that the UK-US corridor remained one of the world's most active in 2025, recording 570 projects, US$43.4 billion in capital and approximately 55,000 jobs. The report's central theme is a shift from volume to value: against an uncertain macroeconomic and geopolitical backdrop, investors on both sides of the Atlantic are concentrating capital into fewer but larger projects, focusing on resilience, long-term strategic positioning and deeper partnerships in sectors they consider structurally important.

Dive deeper: UK investment into the US rose 48% in value despite a decline in project numbers, while US investment projects into the UK grew 2.3%, building on an already substantial base. Expansion of existing operations featured strongly on both sides, accounting for 38% of UK-to-US investment value despite representing around a fifth of projects. Growth concentrated in advanced manufacturing, software and IT, AI infrastructure and data centres, and life sciences, with UK-to-US pharmaceuticals investment up 131% year-on-year.

Looking ahead: The report cautions against complacency on UK competitiveness, noting that many of the advantages the UK has offered international investors have narrowed as competition for investment intensifies. It points to energy costs, taxation, regulation, infrastructure and skills as decisive factors in where companies choose to invest, framing continued transatlantic investment as dependent on the UK addressing them.

Read more: you can find the press release here and the full research here.

BAB Announces 2026 Transatlantic Growth Award Winners

17 June 2026

Overview: BAB announced the winners of the 2026 Transatlantic Growth Awards (TAG) at its annual ceremony in London. Now in its eighth year, the Awards recognise companies demonstrating outstanding commitment to investment, expansion, job creation and innovation across the UK-US corridor.

Read more: You can read the full press release here and see all the companies recognised in the 2026 Transatlantic Growth Tracker.

Thank you for reading this month's Policy and Trade Update. If you have any feedback or comments please contact us.

BAB participates in and offers policy and trade support to the BritishAmerican Business Network, a group of 18 independent trade organisations across North America and the U.K. If you would like to learn more about the network and its activities, please visit our website.



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