09 May 2025

US-UK trade deal: What you need to know

A summary of the US UK trade deal

  • The 25% US global tariff on steel and aluminium is to be supplemented by a new quota system for UK origin steel, aluminium, and certain derivative items. Eligible UK goods will be able to enter the US at most favoured nation duty rates (i.e. The rates that applied before the US steel and aluminium tariff was imposed)
  • A US tariff quota for the import of 100,000 UK cars and an accompanying arrangement for attendant car parts will be introduced. Cars qualifying for the quota will be able to enter the US at the baseline 10% duty rate
  • The 10% US baseline tariff on most other UK origin goods will remain
  • $10 billion purchase of Boeing Aircraft by a UK airline (IAG, the parent company of British Airways, has bought 32 new Boeing planes from the US). In return the US will offer preferential access to UK aerospace components (For example, Rolls-Royce turbofans will be free from US duties)
  • Both the UK and US to accept up to 13,000 tonnes of beef from the other party under a tariff free quota. UK food standards will remain the same (so no chlorinated chicken)
  • The UK will offer the duty-free import of 1.4 billion L of US ethanol under a tariff rate quota
  • There are plans for greater market access for US machinery and agricultural goods onto the UK market. Negotiations will take place that will cover US-UK mutual recognition agreements, conformity requirements and standards
  • The UK digital services tax remains unchanged, however work on a digital trade deal to take place with the US
  • The UK is to be granted preferential treatment if the US adds any other section 232 tariffs (section 232 are the emergency powers being used by the Trump administration to implement tariffs on goods that “threaten national security”. This legislation has been used to justify the original US additional steel tariffs etc.). For example, British pharmaceuticals do not attract US duty and are currently exempt from the 10% baseline tariff, but will attract “preferential treatment” if the US subsequently decides to impose new tariffs on global imports from the industry

Further comments:

  • The UK Government will be hoping this can lead to further reductions and the eventual removal of the 10% baseline for UK origin goods. At the moment, the White House is not prepared to do this
  • The latest White House press conference suggests countries and territories such as the EU – that were to be subject to a proposed 20% tariff that is currently on hold until 09 July 2025 – not to expect a reduction to 10% during their negotiations. If so, for UK exporters, this may mean UK origin export goods will be relatively cheaper and more attractive to US importers than comparable goods sourced from other countries
  • The UK automative and steel sectors will benefit most from the deal
  • Full detail is yet to be published and finalised. Negotiations are still taking place and a final date of implementation is unknown

You can read more about preparing for Trump’s tariffs in our blog here.

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