The UK-US Trade Deal: A Renewal of Transatlantic Ties on VE DAY
Just over a month after the US introduced baseline tariffs on over 50 countries, the United Kingdom is the first nation to secure a new trade deal with the United States in response. Coinciding with the 80th anniversary of VE Day (Victory in Europe Day), the announcement of the UK-US trade deal highlights the enduring strength of the special relationship between the two nations – despite turbulence in recent years due to Brexit.
In this article, we examine the deal’s significance and its implications for UK industry.
From “the Back of the Queue” to the Front of the Line
During the Brexit debate of early 2016, former President Barack Obama made the stance of his administration clear:
“Our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done. The UK is going to be in the back of the queue.”
Of course, this was in part an emotional plea to convince Britons to remain in the EU, as he also clarified that “maybe some point down the line there might be a UK-US trade agreement, but it’s not going to happen any time soon”.
Fast forward to the 31st of January 2020, Brexit Day, and it was time for the UK to begin seeking UK-US trade deal with the new president, Donald Trump. However, due to sticking points on pharmaceutical supplies to the NHS and the distraction of the COVID19 pandemic, a deal was not concluded.
With the winding down of the pandemic aligning with the new administration of former President Joe Biden in 2021, it was hopeful that a trade deal could again be discussed between the UK and US.
However, issues had emerged with post-Brexit Northern Ireland, and former President Biden’s Irish ancestry meant he had a personal interest in seeking a resolution – voicing that no deal would be done until the Northern Ireland Protocol worked and putting the pressure on both the UK and EU to find a way forward.
The way has been found in the Windsor Framework, announced in 2023, but former President Biden signalled that there was no longer any interest from his administration in negotiating a UK-US trade deal before their term was up.
Finally, in 2025, the UK has overcome all of the hurdles since Brexit to claim first place in the race for a US trade deal following their disruptive change of trade policy. The UK-US trade deal was announced with great fanfare from the Oval Office and Number 10 as a continuation of the special friendship between the UK and US – adding to the celebrations on the 80th anniversary of their shared victory in World War II.
The key Details of the UK-US Trade Deal
Within the new deal, there are a series of mutual concessions designed to benefit both economies:
- Steel & Aluminium: The US has agreed to remove the 25% tariff on UK steel and aluminium
- Automotive Exports: US tariffs on UK cars will drop from 27.5% to 10%, effective immediately. There is a quota of 100,000 vehicles annually; however, this is only slightly under the 2023 figure for exports.
- UK Concessions: The UK has lifted tariffs on US ethanol and granted reciprocal market access for beef products, opening new avenues for American exporters. There is a quota of 13,000 metric tonnes for beef trade in either direction.
The 10% tariff on general cargo, introduced by the US Administration as part of its America-First Policy, will remain in place for UK-originating goods which are not otherwise mentioned.
Assessing the Impact of the UK-US Trade Deal
The reduction of tariffs on steel, aluminium, and automotives are a significant win for the UK’s manufacturing section, which is poised to capitalise on the deal. Depending on how the US negotiates with other countries, particularly the EU, the sector may enjoy a significant advantage for the long-term.
Similarly, the reciprocal access for beef producers in both countries provides opportunity for a growing partnership between the two countries’ agricultural sectors.
Despite concerns over quality and the impact on the UK’s health, particularly regarding hormone-treated beef, the UK government has insisted that fresh food standards have not been reduced. Furthermore, there remains no access for pork and chicken products, for which chlorine treatment is a major red line in the UK market.
Although the general 10% tariff continues to receive criticism, this is the minimum set by the US Administration. The UK’s tethering to the minimum benchmark and the US’ reluctance to concede it during negotiation indicates that this will be the minimum for any other countries who negotiate a deal – meaning there will be no disadvantage for UK exporters against other non-US suppliers.
Navigating the deal
Whilst the UK-US trade deal provides immediate relief and benefits to some sectors, the long-term impact on the UK market remains to be seen due to the evolving dynamics between the US and other countries. Whether or not an advantage will be short lived or not remains to be seen.
See our dedicated article on how we can help your business stay ahead of the US tariffs for advice.
Do you have an opinion on the UK-US trade deal which you’d like to discuss, or are you keen to find out how others have reacted? Join the conversation onagricul LinkedIn.
