In a significant move for trade, UK Prime Minister Keir Starmer announced a major agreement with the United States aimed at reducing tariffs that affect various sectors. During his visit to the Jaguar Land Rover plant in the Midlands, Starmer highlighted key changes, particularly in the automotive sector where tariffs on UK cars exported to the US will be reduced from 27.5% to 10% for up to 100,000 cars a year. He referred to this as a “huge and important reduction,” despite the cap on the number of vehicles eligible.
Another pivotal aspect of the deal is the complete elimination of the 25% US tariffs on steel and aluminium. While this represents a modest trade value of around £700 million annually, steel’s political significance cannot be understated, especially following the UK government’s recent intervention to take control of British Steel to safeguard jobs at the Scunthorpe plant from Chinese ownership.
Agriculture emerges as a potentially contentious area within the agreement. Concerns over food safety standards linger, especially among UK voters and farmers regarding imports like chlorinated chicken and hormone-fed beef. Nonetheless, the deal promises exclusive access for UK beef farmers to the US market, while also allowing for £5 billion worth of agricultural exports from the U.S. to the UK. While the National Farmers Union has welcomed these developments, there are cautious concerns regarding the influx of bioethanol imports.
Further details from the agreement reveal additional provisions designed to enhance trade efficiency, such as simplified customs procedures for US imports to the UK, preferential access to UK aerospace components for U.S. firms, and increased support for American companies seeking to engage in UK procurement.
However, some sectors, particularly pharmaceuticals and the film industry, remain uncertain. While pharmaceuticals were not covered in this agreement, discussions continue about potential future tariffs. The film industry, reacting to vague threats from Trump regarding a proposed levy on foreign-produced films, expressed alarm at the lack of protections in the deal.
Overall, while the agreement fosters optimism for increased trade and cooperation between the UK and the US, the negotiations highlight ongoing concerns regarding food standards, local industries, and the implications for various sectors. As negotiations progress, the focus will shift to ensuring that the benefits of this deal are balanced across all areas of trade.