Introduction to the Trade Deal
Sir Keir Starmer was at home in Downing Street, watching Arsenal in the Champions League, when he received a call from Donald Trump. The call was a last-minute attempt by the president to get a better deal from the Prime Minister. This conversation was enough to convince Sir Keir and his economic secretary, Jonathan Reynolds, to take the opportunity.
The Trade Agreement
The result of the negotiations was not the broad trading business that Brexiteers had dreamed of, and it was certainly not a free trade agreement. Instead, it was a close agreement that ensured immediate relief for a handful of sectors, with mutual 10% tariffs.
Key Sectors Affected
The auto industry was one of the most urgent sectors, with the UK facing the imposition of 25% tariffs last month. However, a 10% tariff will now apply to a quota of 100,000 vehicles per year, which is less than the 111,000 exported to the United States in 2024, but close enough for a deal. The car sector will still make much less than before, but the minister believes it is better than not having a deal and offers favorable conditions compared to other major US trade partners.
Steel and Aluminum
No tariffs were secured for steel and aluminum, along with an obligation to work with the USA to prevent Chinese dumping. This is a clear victory for the battered industries in the UK, although they are modest, with US exports worth only around £400 million per year.
Food and Agricultural Products
In return, Britain had to open access to food and agricultural products, starting with beef and ethanol used for fuel and food production. Instead of tariff rates for beef that were used on both sides (12% in the UK and 20% in America), 13,000 tons of beef can flow around 1.5% of the British market in both directions.
Biggest Victories
One of the biggest victories is that the production standards that apply to food and animal products, and prevent the sale of meat treated with hormones, will be maintained. This reveals the prospect of a loosening of PLC reviews on trade in the European Union, a valuable reduction in bureaucracy that is a priority for the UK during recovery negotiations with Brussels.
Technology Transactions
There were broad obligations to carry out business for technology, AI, and an "economic security ceiling," and a lot of hope is based on the promise of the USA to offer "preferred conditions" with regard to pharmaceuticals and other sectors. However, there was no mention of proposed film duties that were still unclear even in the Oval Office.
Conclusion
Together, officials describe these steps as "banking sector" while they continue to try to negotiate the remaining tariffs. The challenge from here is that Mr. Trump’s "mutual" tariff is not mutually mutual, with the US trade tariffs falling to less than 2%, while the UK rose to 10%. As a result, British exporters remain in a significantly worse position than at the beginning of April, although they are better than before the president’s call. For the time being, several British industries have secured concessions that no other country can claim.
