US Trade Deal Provides Welcome Relief

The UK and the US jointly announced a trade agreement on 8th May, which will see the reduction and removal of several trade barriers introduced by US president Donald Trump earlier this year.

The US-UK Economic Prosperity Deal (EPD) was announced via a televised phone call between the two leaders, with UK prime minister, Sir Keir Starmer, calling it a “historic day” adding that thousands of manufacturing jobs will be saved by the deal, with new ones created through increased market access.

US president, Donald Trump, called the agreement a “great deal for both countries”, while emphasising “billions of dollars of increased market access for American exports”, especial agricultural products.

The 10% ‘reciprocal’ tariff rate, which was applied to UK exports to the US earlier this year, is unaltered by the agreement and remains in place.

The agreement outlines how recent US tariffs will be reduced on key British manufacturing sectors. Duties on car export will be lowered from 27.5% to 10%, while tariffs on steel and aluminium will be removed entirely.

In a press statement announcing the agreement, the Department for Business and Trade said the measures would save “thousands of British jobs across the country”.

Reacting to news of a trade deal in principle with the US, Shevaun Haviland, Director General of the BCC, said:  

  

“This deal will be met with a huge sigh of relief by many British businesses.  

 

“The reduction in the 25% tariffs on most of our automotive exports and the removal of levies on steel and aluminium are the biggest wins. 

 

“These sectors had been left reeling as jobs, investment and sales were all cut or put on hold. This framework agreement will give them some much needed certainty. They will be keen to see it quickly enacted so they can swiftly re-establish orders and supply chains.  

 

“The news on aerospace, including jet engines is also good news, as is additional protection from tariffs on our pharmaceutical sector.  

 

“But this must not be the end of the process; we must continue to push the argument for free and fair trade across all economic sectors and that tariffs are a lose-lose position.  

 

“The commitment to pursue a digital trade deal and make commerce easier in the future is also a worthy ambition. 

 

“Our bilateral trade is already worth £300bn, we have £500bn invested in the US and it has £700bn of investment stock in our economy.   

 

“There is a high-level of co-dependency in our economic relationship, and it is in both our interests to continue building upon those strong foundations which have developed over decades. 

 

“Following on from the India trade deal, the government should be congratulated on what it has achieved this week, but our economy still needs more. 

 

“Global trading conditions remain precarious. There must be a bold reset agenda with the EU to reduce trade costs, and it must help UK companies seize the opportunities in the fast-growing Indo-Pacific region.” 

 

Please click here for the BCC May briefing document on the US-UK Economic Prosperity Deal.

 

Practical support for businesses

Please do get in touch with the Chamber's International Trade Centre for support in responding to the new US tariff regime.

Email: itc@hull-humber-chamber.co.uk