On 8 May 2025, the UK government announced a landmark trade agreement with the United States, aimed at reducing tariffs and bolstering key British industries. This deal is projected to save thousands of jobs, particularly in the automotive and steel sectors, and marks a significant step in strengthening UK-US trade relations.
Key Achievements of the UK-US Trade Deal:
- Reduction of Car Export Tariffs:
The US has agreed to lower tariffs on British car exports from 27.5% to 10% for up to 100,000 vehicles annually. This move is expected to save hundreds of millions of pounds for UK car manufacturers, notably benefiting companies like Jaguar Land Rover. - Elimination of Steel and Aluminium Tariffs:
Tariffs on UK steel and aluminium exports to the US, previously set at 25%, have been removed. This change reopens the US market to British steelmakers, providing a critical boost to an industry that supports approximately 80,000 jobs across the UK. - Enhanced Market Access for UK Farmers:
The agreement includes a reciprocal arrangement allowing UK farmers to export up to 13,000 metric tonnes of beef to the US. Importantly, this deal maintains existing UK food safety standards, ensuring that consumer protections remain intact. - Removal of Tariffs on US Ethanol:
The UK will eliminate tariffs on US ethanol imports, facilitating the entry of 1.4 billion litres into the UK market. This measure is anticipated to lower costs for UK industries that use ethanol, such as manufacturing and transportation. - Support for the Whisky Industry:
The resolution of the Section 232 tariff dispute has led to the lifting of tariffs on American whiskey. This development is expected to benefit UK spirits importers and the hospitality industry, while also encouraging greater investment in the UK spirits sector by US companies. - Commitment to Ongoing Trade Negotiations:
Both nations have expressed a commitment to continue discussions on broader trade issues, including digital services taxes and pharmaceutical tariffs. These ongoing negotiations aim to further enhance bilateral trade relations and address remaining areas of concern.
This trade agreement represents a significant advancement in UK-US economic relations, providing immediate benefits to key industries and laying the groundwork for future cooperation.
