UK and South Korea Strike Landmark Trade Deal: 98% of Goods Tariff-Free

The United Kingdom has secured a major upgrade to its trade relationship with South Korea, signing a free trade agreement that guarantees tariff-free access for 98% of goods. This deal, finalized just weeks before the previous arrangement was set to expire, marks a significant milestone in Britain’s post-Brexit trade strategy and strengthens ties with one of Asia’s most dynamic economies.

Under the new agreement, British exporters will continue to enjoy duty-free access on key products such as luxury cars, pharmaceuticals, and food staples. Iconic brands like Bentley, Guinness, and Scottish salmon will maintain their competitive edge in South Korea’s growing market. The automotive sector, in particular, stands to benefit from modernized rules of origin, ensuring that vehicles assembled with global supply chains still qualify for tariff-free treatment.

Beyond goods, the pact opens new doors for services. UK firms in finance, insurance, and digital trade are expected to gain from streamlined regulations and provisions for electronic contracts, potentially boosting services exports by £400 million annually. These measures reflect a forward-looking approach, embracing digital trade and supply chain resilience.

The economic stakes were high: without this agreement, British exporters faced the prospect of steep tariffs on an estimated £2 billion worth of goods. Instead, the deal safeguards jobs linked to trade and reinforces the UK’s ambition to remain a global trading hub. Trade between the two nations already reached £15.8 billion in 2024, a 32% increase over the past decade, and this agreement is poised to accelerate that growth.

Politically, the deal is the fourth major trade agreement signed by the UK in 2025, following pacts with the EU, India, and the US. Prime Minister Keir Starmer hailed it as “a huge win for British business and working people,” while South Korea emphasized its role in deepening supply chain cooperation and digital integration.

As global economic uncertainty looms, this agreement delivers stability and opportunity for British exporters. It’s more than a trade deal—it’s a strategic statement of intent, positioning the UK as a modern, outward-looking economy ready to thrive in a connected world.