The United Kingdom and the United States have established a massive trade deal. This agreement is about to transform their economic partnership. At last week’s G7 summit, leaders agreed to the deal that addresses most of the world’s onerous tariffs and import quotas. This agreement highlights the need for collaborative efforts between the two countries. Worries continue to hang over UK steel and aluminium exports. They’re currently subject to a 25% tariff, and this could jump to 50% if a deal isn’t struck by the swiftly approaching July 9 deadline.
Under the terms of the new agreement, this will be eliminated by the UK’s 20% tariff on US imports of beef. This amendment will increase the quota to 13,000 tonnes. This move will certainly boost American beef trade with the UK market. This means UK motor manufacturers can now export up to 100,000 vehicles to the US. They will benefit from a lower tariff of 10% compared to the former one standing at 27.5%. Such preferential access to the world’s largest consumer market is expected to boost the British carmakers by at least $6 billion.
In a major step, tariffs on UK aerospace exports have been reduced to zero. At the same time, the UK has reportedly agreed to remove tariff barriers on US ethanol imports. As a consequence, up to 1.4 billion litres of US ethanol can now enter the UK tariff-free. Those fall under the agreement’s broad ban on duties and tariffs, which former President Donald Trump originally levied. These tariffs drew lines in the sand between both countries.
UK Prime Minister Sir Kier Starmer announced the trade deal as “historic.” He touted its ability to protect strategic industries important to the UK economy. We know that view is strongly shared by Business and Trade Secretary Jonathan Reynolds. He’s convinced the deal could save “hundreds of millions each year” while safeguarding “thousands of jobs” in logistics, engineering, and manufacturing.
The landmark trade deal spans over $900 billion (£656 billion) in goods and services. This is a testament to what an important trading relationship the UK and the US have. This collaboration is one of the biggest of its kind in the world, and Japan and the United States know just how important this partnership is.
Despite these advancements there are worries still around the steel and aluminium tariffs. The threat remains a 50% tariff if a final settlement is not achieved by July 9. This uncertainty has created a climate of fear among UK steel producers about their continued presence in the US market.
“I don’t think I’ll need to,” – President Trump