Looking specifically at the United Kingdom, the United States should pay particular attention to their approach. It’s preparing itself to undertake ambitious bilateral trade negotiations to eliminate tariffs and non-tariff barriers on a wide range of American goods. For the U.S., this is primarily about bringing down the UK’s 10% automotive tariff to 2.5%. This dramatic cut could offer enormous savings opportunities for U.S. manufacturers and producers.
The American government is currently making its USTR’s terms for the upcoming trade negotiations. We’re shining a spotlight on the importance of the UK as our 6th largest trading partner. Over the course of 2024, the UK would lead the way among U.S. imports alongside Mexico and China overall as an important partner. That’s why this round of negotiations are so important.
The agenda includes combatting automotive tariffs. Importantly, they’ll tackle agricultural import rules, particularly those impacting U.S. beef. Ironically, the U.S. has been one of the most vocal countries pushing to roll back these restrictions. This step is intended to further open the UK market to American agricultural products.
Focus on Automotive Tariffs
The tariffs as we speak are at 10%. This rate has the effect of making it expensive for American car manufacturers to export their vehicles to the UK market. The United States does not waver from its assertion that reducing this tariff to 2.5% would benefit American producers directly. Further, it will improve their long-term competitiveness in the globally-competitive automotive sector.
This proposed further reduction is consistent with the broader goals of U.S. trade policy. It’s about getting rid of or reducing the barriers that US goods face in foreign markets. The automotive industry is the engine of the U.S. economic recovery. If these tariffs are removed, we would help lead the way to more domestic production and a tide of job growth in this fast emerging sector.
U.S. officials are prepared to underscore the importance of this issue during negotiations, emphasizing that lowering tariffs will ultimately benefit consumers in both countries by leading to lower prices and more choices in the automotive market.
Agricultural Import Rules Under Scrutiny
The US is looking to address automotive tariffs in the ongoing trade negotiations with the UK. They will further hone in on cutting agricultural import barriers. As it stands, very strict regulations govern the import of most agricultural products—including U.S. beef. These onerous regulations have proven to be obstacles for American farmers and ranchers trying to gain access to the highly sought after UK market.
The U.S. government has been making strong overtures to ease such restrictions. This amendment would make it much easier for American agricultural products to gain a foothold in the UK. Greater access will better give American farmers a leg up on their UK competitors, while giving UK consumers access to a greater diversity of products.
Changing agricultural import rules can build stronger bilateral trade ties between the two countries. The U.S. aims to present data demonstrating the safety and quality of its agricultural exports, fostering confidence among UK consumers and policymakers regarding American products.
Revising Rules of Origin
One other major issue on the agenda for U.S.-UK trade talks is changing the rules of origin. This amendment will have a significant impact on the products traded between the two countries. These country of origin law regulations determine what portion of a product’s total content must originate from a given country. Meeting this requirement is what ultimately qualifies the product for preferential tariffs or treatment.
For their part, the United States is actively trying to weaken these rules. This will in turn contribute to more convenient and efficient trade flows, while encouraging greater collaboration between U.S. and UK manufacturers. Current rules can pose major challenges for businesses just trying to participate in cross-border trade, resulting in a disincentive for working together.
Our U.S. negotiators should push for strong flexibility provisions. These changes will provide better accommodation for contemporary supply chains and increase trade volume. We hope that this revision leads to more robust economic cooperation and partnership between the two countries. As a result, businesses on both sides of the Atlantic will prosper.