W.37 Policy Watch

The Policy Watch is a weekly update which aims to provide concise insights into the current policy landscape. Tailored for our members and individuals interested in international affairs, this update offers a brief yet comprehensive summary of key developments affecting policy decisions and political trends both globally and locally.

Global 

With the ongoing US deals, the differential treatment of countries is constantly changing the landscape of international trade. This week, our global focus is on how the US applies tariffs differently to the UK and the EU, either stacking them on top of existing rates or replacing them altogether. 

UK 

• The US-UK Economic Prosperity Agreement utilises a “stacked tariff” system where a new 10% reciprocal tariff is added to existing Most-Favoured Nation (MFN) rates. This means UK exporters face cumulative duties. For example, luxury textiles subject to a 35% MFN rate now incur a 45% total tariff. 

EU 

• In contrast, the US-EU Framework Agreement establishes a 15% tariff ceiling that replaces rather than stacks upon MFN rates. According to official EU communications and US trade documents, this means EU exporters pay at most 15% regardless of underlying MFN rates, providing more predictable market access. This structural difference creates competitive imbalances, particularly affecting UK exporters in high-tariff sectors. 

Potential issues 

• These developments may affect integrated supply chains. UK manufacturers incorporating Swedish components could lose preferential US market access under stricter rules of origin. For example, goods produced with Swedish steel or aluminium may face higher tariffs due to the goods not being considered “local”. Additionally, UK regulatory alignment with US standards may introduce non-tariff barriers for EU goods entering the UK market. 

Local 

Recent EU digital and AI regulations are rapidly evolving, creating important compliance and business implications for UK companies operating in Sweden and across the EU. 

EU AI Act 

• In August 2025, the EU’s AI Act took effect, activating new obligations for AI models and establishing the AI Office and AI Board to oversee compliance. Providers must now publish transparency documentation, with penalties of up to 7% of global turnover for violations. Sweden has been aligning its national law and guidance with these EU rules. The AI Act will operate alongside the GDPR, and Sweden is currently conducting a national review to determine whether any local adaptations are necessary due to the AI Act, with findings expected no later than 30 September 2025. 

EU Data Act 

• The EU Data Act is scheduled to come into effect on 12 September 2025, requiring manufacturers of connected devices to provide users access to their data and banning unfair lock-in clauses. The Data Act requires that Member States complement the act with national laws and more local regulations. For Sweden, national enforcement rules will be notified by the same date, meaning Swedish authorities can sanction non-compliance locally. UK companies selling connected devices or digital services in Sweden or across the EU will have to update contracts, IT systems, and data-handling processes. 

Sara Malmgren and Hanna Ullerholt from Eversheds Sutherland elaborate further below on the EU Data Act, providing expert insight into how the regulation affects businesses in practice: 

“The EU Data Act (Regulation (EU) 2023/2854), effective from 12 September 2025, sets new rules for data access and data sharing across the EU. It applies to manufacturers and users of connected devices (such as smart watches and other IoT devices), data holders, data recipients and providers of data processing services where the product or services are put on the EU market. 

The regulation differs in some details depending on the size of the manufacturer or designer of the connected product, or provider of related services, where micro- and small enterprises may be exempt from certain obligations. The Data Act establishes a fundamental user right that affects any party that makes connected products or related services available in the EU. On request, businesses that hold data from a connected product or related service, whether they build the device or merely resell it, must transmit data to the user or to a third party. In cases of exceptional need (e.g., public emergencies), public sector bodies may also access this data. From 12 September 2026, connected products and related services must be technically designed to allow users direct access to the data.  

The Data Act also introduces new pre-contractual disclosure requirements and renders unfair contract terms that unilaterally restrict data use or limit liability unenforceable. Additionally, cloud service providers must remove obstacles that prevent customers from switching to another provider or to on-premises infrastructure, and by 2027, all switching fees must be removed. 

Non-compliance with the Data Act could have substantial consequences as national regulators within the EU are empowered to impose effective, proportionate, and dissuasive penalties for infringements of the Data Act. Any company involved in collecting or storing data via connected devices or providing services related thereto is recommended to assess to what extent the act applies and take necessary action, which may, among other things, include the need to technically adapt products or services. “

For more information or additional questions, contact Sara Malmgren, Partner, and Hanna Ullerholt, Associate at Eversheds Sutherland.