Significant changes to the UK Trade Remedies System

As part of its June 2025 Trade Strategy, the UK government previously announced plans to strengthen its trade defence toolkit.  

In pursuit of this objective, Clauses 107 and 108 of the Finance (No.2) Bill now seek to amend the Taxation (Cross-border Trade) Act 2018 (TCTA), implementing significant changes to the UK’s trade remedies system. The Bill does this through the introduction of broader ministerial powers to intervene swiftly and protect UK businesses, making the trade remedies system more responsive to combatting increasingly harmful global trading practices, particularly dumping, subsidisation, and unexpected import surges.

The Bill has passed initial debate in the House of Commons and is now in its detailed examination phase, with committee work scheduled to finish by late February 2026. The proposed changes will take effect once approved by Parliament and further secondary legislation is adopted.

Key Proposed Reforms  

1. Enhanced Ministerial Powers for Investigation Initiation  

The Trade Remedies Authority (‘TRA’) can currently initiate dumping or subsidisation investigations either:  

• following an industry application; or
• at the Secretary of State’s (SoS) request in exceptional circumstances

The TRA then decides whether to proceed.  

Clause 107 would amend Schedule 4 to the TCTA, granting the SoS power to direct the TRA to initiate investigations where “exceptional circumstances" and sufficient evidence of dumping or subsidisation causing injury to UK industry exists, in line with World Trade Organization (“WTO”) obligations.

This marks a key change: the SoS’s role shifts from request to directive, obliging the TRA to act.

"Exceptional circumstances" remains undefined in legislation. The SoS’ power to request an investigation has been used in several cases, though mainly for “transition reviews” – cases concerning the rollover of inherited EU measures post-Brexit. In these cases, the SoS requested investigations to ensure continuity rather than in response to industry applications.  It remains to be seen how this discretion would operate in other contexts beyond transition reviews.

Clause 108 would amend Schedule 5 to the TCTA, allowing the SoS power to direct the TRA to initiate a safeguard investigation where satisfied that UK producers are suffering serious injury from increased imports. Unlike dumping or subsidy investigations, this discretion is not limited to “exceptional circumstances”.

Viewed collectively, the amendments would require the TRA to commence an investigation if instructed by the SoS, who would first have to consult the TRA before issuing such an instruction. The key benefit of these reforms is not a fundamental shift in the TRA-SoS dynamic, but rather the creation of a pathway for investigations to proceed without requiring a formal industry application. This is particularly valuable in two scenarios:

• where affected UK industries lack the substantial resources required to prepare and submit applications themselves; and  
• where the SoS identifies strategic priorities for applying duties to certain goods, even in cases where full cooperation from the relevant UK domestic industry may not be forthcoming or feasible.

2. Removal of the Mandatory Lesser Duty Rule  

Currently, when setting import duties in response to dumping or subsidies, the TRA calculates two figures:  

• the injury margin: this measures how much UK industry is actually being harmed by dumping or subsidisation. It calculates the difference between current import prices and the price at which UK producers could compete fairly without suffering injury; and
• the dumping or subsidy margin: this measures the extent of unfair pricing. For dumping, it's the difference between what foreign companies charge in the UK versus their home market (or a fair market price). For subsidies, it's the amount of government financial support the foreign producer received.

Under the Lesser Duty Rule, the TRA recommends that the lower of these two amounts is applied, ensuring measures are set at the minimum level necessary to prevent injury. The UK voluntarily adopted this approach despite it not being mandatory under WTO rules.

Clause 107 would remove this requirement. Duties could now be applied at the full dumping or subsidy margin rather than being limited to the injury margin. The Secretary of State retains the option to set lower duties by regulation where appropriate.  This aligns the UK with the EU, US and Australia, who take a more hard-line approach to trade defence measures.

Addressing Criticisms: The Benefits of EU Alignment

The reforms help address industry calls for a more robust post-Brexit framework. UK Steel welcomed changes as making the system 'more proactive’ and ‘speeding up the pace at which investigations are completed’. Empowering ministerial initiation of investigations and removing the mandatory lesser duty rule eliminates what some UK industries have identified as key structural weaknesses that leave them under-protected compared to EU counterparts.  

These legislative changes complement a series of operational developments the TRA has introduced over the past year to strengthen the UK's trade defence capabilities:

• Import Trends Monitor Introduction: tracks 12-month import data to identify anomalous surges in volume or drops in unit prices, enabling proactive TRA outreach to potentially injured industries.  
• Establishment of the Trade Remedies Advisory Service (formerly the Pre-Application Office): provides enhanced guidance to SMEs throughout the investigation process.
• Launch of an Imports Dashboard: offers real-time trends on UK imports subject to anti-dumping and countervailing measures.

This strengthening of the TRA and SoS' powers, through enhanced ministerial direction over investigation initiation and the removal of the mandatory lesser duty rule, further aligns the UK with EU practices, where both mechanisms are standard features of the trade defence toolkit

EU alignment offers potential benefits in terms of reducing the risk of the UK becoming a more attractive destination for imports diverted from the EU market due to lower UK duties and creates greater consistency in how major trading partners respond to unfair trade practices. On the other hand, it may also result in higher costs for UK importers and consumers who benefit from lower-priced imports.

How we can help  

Our Competition, Regulatory and Trade team is closely tracking the progress of this Bill.  

If you would like to discuss what the changes could mean for you, please get in touch.

Contributor: Jack Hainey

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at January 2026. Specific advice should be sought for specific cases. For more information see our terms & conditions.