More than half of British businesses are struggling to expand their sales in Europe, according to research from the British Chambers of Commerce (BCC).
A new survey by the BCC Insights Unit of 989 businesses (96% SMEs) shows EU trade is becoming increasingly difficult, and this year's reset needs to continue at real pace in 2026 to deliver vital deals for businesses.
The BCC has used the data to create a business manifesto for the EU Reset as the urgency of real-world change continues to ratchet up.
It identifies an increasing number of challenges as regulations continue to diverge, making it more and more difficult for traders to adapt on both sides of the Channel.
The Trade and Co-operation Agreement (TCA) was agreed on Christmas Eve in 2020 to allow tariff-free trade with the EU once Brexit took effect.
But services access has been limited by rules on business mobility and only 16% of exporters think the deal is helping them to grow sales in Europe, with 54% disagreeing.
Emerging issues like de minimis exemptions for low value parcels are also creating waves as the EU and UK work out their reactions to changes pushed by the US.
The EU is now removing its exemption in 2026, but the UK will not follow suit until as late as 2029. This risks harming the competitiveness of British firms exporting to the EU alongside trade diversion from Chinese companies into the UK.
The one bright spot is that awareness of upcoming changes in trade rules and regulations has improved significantly compared to last year. In 2024, more than three quarters of firms knew no details of much of the legislation.
But as the onslaught of changes has caused firms increasing cost and bureaucracy, more have kept on top of new legislation. Only 11% did not know about planned changes on steel tariffs, while just a third (36%) were unaware of EU customs and VAT rule changes.
The BCC has sent its EU reset report to Government, providing recommended solutions to many of the problems.
Commenting on the report and its findings, Steve Lynch MBE, the BCC’s Director of International Trade, said: “With a Budget that failed to deliver meaningful growth or trade support, getting the EU reset right is now a strategic necessity, not a political choice. Trade is the fastest route to growth, yet firms tell us it is becoming harder, not easier, to sell into our largest market.
“This year’s reset was presented as a turning point, and wins like rejoining Erasmus+ help, but businesses need much more. They want clarity, certainty and delivery at pace in 2026, and an understanding of the government’s vision that stretches far beyond.
“Businesses do not want a future with the EU where they constantly have to manage friction and are beset with recurring crises. They want a mature, stable relationship that underpins trade, investment and security.
“That means agreeing deals on food checks, emissions trading and electricity, restarting defence cooperation, and finding a pragmatic path on youth mobility. But it also means committing to a framework that builds deeper cooperation, provides better regulatory dialogue and leads to fewer shocks.
“Without that strategic horizon, trade issues will keep piling up at the UK’s door, but with it, businesses on both sides of the Channel can plan, invest and drive growth.”
The BCC’s EU reset report sets out 25 recommendations to improve UK-EU trade in the short, medium and long-term.
Its top five proposals for discussions in 2026 are:
- Negotiate a deep SPS (animal and plant products) agreement to remove export health certificates
- Finalise UK and EU Emissions Trading Scheme linkage to exempt goods from Carbon Border Adjustment Mechanisms
- Establish a youth mobility scheme
- Secure full UK participation in SAFE – the EU’s Defence Finance Initiative
- Enhance VAT cooperation and customs simplification to reduce trade costs