The UK and US have agreed on a partial trade deal following the UK’s recent agreement with India, aiming to strengthen transatlantic economic ties. Finalised during a somewhat disjointed speakerphone conversation between Prime Minister Keir Starmer and Donald Trump, the deal delivers a few notable breakthroughs—but leaves significant areas unresolved.
A key outcome is the reduction of US tariffs on UK-manufactured cars, from 27.5% to 10%, capped at 100,000 vehicles annually—nearly the UK’s total export volume to the US last year. Starmer called it a “huge and important reduction,” although the cap limits its impact.
Steel and aluminium tariffs have been entirely lifted, scrapping the previous 25% duties on UK exports worth around £700 million per year. While modest economically, the removal is symbolically significant, especially after the UK’s intervention to protect British Steel.
Agriculture, a politically sensitive topic, saw carefully negotiated terms. The UK secured access for its beef producers to the US market, while maintaining bans on chlorinated chicken and hormone-fed beef. In exchange, the UK will accept £5 billion worth of American agricultural products. US officials welcomed the move as a major win for their farming sector.
The agreement also promises streamlined customs for US imports, preferential access to UK aerospace components, and greater support for US firms bidding on UK contracts.
Crucially, the 10% duty rate for the majority of UK goods exported to the US remains in place, leaving much of the broader trade relationship untouched for now.
The team at Killick Martin will be monitoring further developments closely.
