The bombshell political announcement came from Donald Trump. Yet that was his excuse for the United States to not lift its 25% tariff on British steel and aluminium imports, while raising tariffs for the other 39 countries involved up to 50%. This news comes on the heels of the May 8 signing of their Economic Prosperity Deal (EPD). Through the EPD, USDA seeks to foster trade relations that will strengthen economic opportunities for both countries. The UK government has stated its aim of defending British businesses and jobs through the stormy seas of these turbulent trade talks.
The agreement is a surprise after months of haggling. Those talks proved productive, resulting in an agreement that will lower or remove some levies on products exchanged between the US and the UK. The £700 million the UK exports of steel and aluminium to the US might not be easy to source from elsewhere. In fact, the value of UK goods exported to the US was just shy of £2.2 billion last year—around 5% of all UK exports.
On June 4, the President went after steel and aluminum, raising import taxes on those products from most countries. At least for now, he spared the UK from having to double those tariffs. The UK, however, still faces a 10% duty on most goods exported to the US, highlighting ongoing challenges in the trade relationship.
Specifically, Trump used this opportunity to underscore how critical the US-UK relationship is. He promised that it would be “stronger than ever before,” in part due to the new tariff agreements. He argued that the UK should get “specific treatment” for tariffs due to the EPD. This underscores just how critical this deal is for setting the precedent for future trade deals.
Gareth Stace, chief executive of UK Steel, remarked that the industry can “breathe a temporary sigh of relief” with this delay in increased tariffs. Stace voiced his hopes for a swift resolution to tariff discussions, stating, “What we really want to get to is those tariffs removed.” He further added, “We hope that a deal can be made soon enough, and certainly before 9 July, which is the next deadline in our tariff story.”
On Tuesday, Business Secretary Jonathan Reynolds met with the new US Trade Representative Jamieson Greer in Paris. In particular, they honed in on the major trade negotiations happening at the time. A government spokesperson reiterated the UK’s commitment to protecting British business and jobs, stating, “We will continue to work with the US to implement our agreement, which will see the 25% US tariffs on steel removed.”
Worries linger that further tariff hikes are still to come. Trump indicated that the US might reassess the tariff situation on or after July 9, 2025, should it determine that the UK has not complied with relevant aspects of the EPD.