Executive summary

This edition of Trade Talking Points provides updates on the United States (US), United Kingdom (UK) and European Union (EU) trade policies, as well as an update on the World Customs Organization Harmonized System.

Latest US trade policy announcements

US-El Salvador and US-Guatemala Agreements on Reciprocal Trade

On 29 and 30 January 2026, US Trade Representative Jamieson Greer, signed the US-El Salvador Agreement and the US-Guatemala Agreement on Reciprocal Trade.

The agreements share similar features, including:

• The US will remove tariffs on Salvadoran and Guatemalan exports that cannot be grown, mined or produced in the US, in addition to products originating under the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).
• El Salvador and Guatemala will accept US-manufactured vehicles that meet US vehicle safety and emissions standards.
• El Salvador and Guatemala will recognize US Food and Drug Administration certificates and prior marketing authorizations for medical devices and pharmaceuticals.
• El Salvador and Guatemala will eliminate non-tariff barriers for US agricultural exports, particularly regarding fumigation requirements.

If goods do not qualify for specific exemptions from US tariffs, their tariff rate will be 10%. (For background, see EY Global Tax Alert, US announces new trade frameworks and expanded agricultural tariff exclusions, dated 17 November 2025.)

US-India tariffs

On 2 February 2026, President Trump announced via social media that IEEPA tariffs currently levied on Indian-origin goods will be reduced to 18%.

India had previously been subject to two separate International Emergency Economic Powers Act (IEEPA) actions — tariffs announced in April 2025 under Executive Order 14257 (25%) and an additional ad valorem duty due to importation of Russian oil (25%). (For background, see EY Global Tax Alert, US imposes additional tariffs on India for buying oil from Russia, dated 6 August 2025.)

The original US tariff on India has been reduced from 25% to 18%, and the Russian oil tariffs have now been dropped following the agreement, effectively reducing US tariffs on India from 50% to 18%. Prime Minister Modi and President Trump have agreed that India will reduce its oil dependency on Russia. India has also committed to removing tariffs and non-tariff barriers on US goods.

There is currently no Federal Register Notice and supporting customs guidance from US Customs and Border Protection (CBP) to confirm the tariff changes.

US Renewal of African Growth and Opportunity Act

On 3 February 2026, US Trade Representative Jamieson Greer signed the reauthorization of the African Growth and Opportunity Act (AGOA) trade preference program through to 31 December 2026.

AGOA provides duty-free access to the US market for most exports from eligible countries (32 total) in sub-Saharan Africa (SSA) under the Trade Act of 1974.

The reauthorization of AGOA will have retroactive effect from 30 September 2025.

Latest EU trade policy announcements

EU and India conclude FTA Negotiations

On 27 January 2026, the EU and India concluded negotiations for a free trade agreement (FTA). The deal is expected to double the export of EU goods to India by 2032 and will eliminate or reduce tariffs on 96.6% of EU goods exports to India.

In particular, the EU's automotive and agricultural export sectors will heavily benefit from the agreement. Tariff rates on EU automotive exports will gradually decrease from 110% to 10%, while tariffs on EU exports of wine will decrease from 150% to 75%. Sensitive EU agricultural sectors producing goods such as beef and sugar are fully protected by being excluded from the liberalization.

Negotiations for an FTA between the parties commenced in 2007; however, they were suspended in 2013 and then restarted in 2022.

The agreement must be signed and ratified by both parties before it enters into force.

EU and Ecuador conclude negotiations for Sustainable Investment Facilitation Agreement

On 23 January 2026, the EU and Ecuador concluded negotiations for a Sustainable Investment Facilitation Agreement (SIFA). The SIFA is the first deal of its kind to be negotiated with a Latin American country and will facilitate EU investment in Ecuador.

The SIFA will encourage EU investment in Ecuador by:

• Simplifying investment authorization procedures
• Improving dialogue between investors and the administration through focal points
• Increasing cooperation between the EU and Ecuador by further enhancing investment relations

The SIFA builds on the existing trade agreement between the EU and Ecuador, which came into effect in 2017 and aims to further develop the EU's foreign direct investment stock in Ecuador, which was valued at €8.2b in 2023.

EU-Singapore Digital Trade Agreement enters into force

On 1 February 2026, the EU-Singapore Digital Trade Agreement (DTA) entered into force, providing a rules-based foundation for digital trade between the EU and Singapore. The DTA was signed on 7 May 2025, and aims to:

• Establish a safer online environment for consumers by enhancing the protection of personal data and privacy and enhancing consumer welfare
• Prohibit unjustified data localization requirements, which will protect businesses from protectionist policies and encourage confidence in digital markets
• Provide greater legal certainty for businesses (promoting paperless trade, ensuring the validity of electronic signatures, contracts, and invoices)

The DTA is the EU's first-ever standalone bilateral digital trade agreement, which aligns with the EU's policy of expanding its network of digital trade agreements and digital trade chapters in its free trade agreements.

Latest UK trade policy announcements

UK-India Free Trade Agreement Update

On 29 January 2026, the House of Commons Library published a briefing paper providing an update on the expected impact of the UK-India FTA and explaining recommendations made by the Commons Business and Trade Committee. The UK-India Comprehensive Economic and Trade Agreement was signed in July 2025, with the purpose of reducing trade barriers between both parties. The agreement has not yet entered into force.

The Department for Business and Trade (DBT) has estimated the FTA will increase UK GDP by 0.13%. Under the deal:

• Tariffs on UK whisky exports will fall from 150% to 75%.
• Tariffs on UK car exports will fall from 110% to 10%, although a quota is in place.
• Sensitive UK agricultural products, such as sugar and chicken, are excluded from the liberalization.

The agreement text was presented to the UK Parliament on 21 January 2026 and will be debated in the House of Commons on 9 February 2026, where members of Parliament will be able to raise any potential concerns prior to entry into force later in 2026.

UK Prime Minister visits China to strengthen UK-China economic relations

During his state visit to China on 29 January 2026, UK Prime Minister Keir Starmer announced new opportunities for British businesses in China, following discussions with Chinese President Xi Jinping.

Both parties agreed to conduct a "feasibility study" to explore whether to enter negotiations for a bilateral services agreement.

In addition, the UK and China agreed to cooperate more closely on technical education and training, food safety, and animal and plant quarantine.

Latest global trade developments

World Customs Organization Harmonized System update

On 21 January 2026, the World Customs Organization (WCO) published an update to the Harmonized System (HS) that will take effect on 1 January 2028, also known as HS 2028.

The HS is a standardized system for classifying traded goods, with the last update being the HS 2022 edition. HS 2028 comprises 299 sets of amendments, developed alongside the World Trade Organization and the World Health Organization, to reflect changing trade patterns, technological developments and the increasing importance of the HS in advancing regulatory and policy goals.

A major focus of HS 2028 is public health, with 38 new codes for vaccines and essential medical goods such as PPE. These revisions aim to improve global readiness for future health emergencies by giving governments clearer visibility of vaccine and medical-goods flows.

Additional updates include a new heading for dietary supplements and improved classification of plastic waste and single-use plastics, strengthening environmental monitoring and enforcement.

Over the next two years, WCO Members will prepare for the implementation of HS 2028, for example by undertaking the relevant legislative processes and providing training to customs authorities, with support from the WCO.