United States and UK Announce Trade Deal
On May 8, 2025, the United States and the United Kingdom announced a trade deal that includes increased market access for U.S. exports. The deal is not a formal free trade agreement and could indicate the types of trade deals the administration will pursue with other countries. The details will be finalized in the coming weeks.
Tariffs
UK tariffs: The UK will reduce its tariffs on U.S. goods from 5.1% to 1.8%.
Autos: The United States will agree to an alternative arrangement for the Section 232 tariffs on UK autos. Under the deal, the first 100,000 vehicles that UK manufacturers import into the United States each year are subject to the reciprocal rate of 10%, down from 25%, and any additional vehicles each year are subject to 25% rates.
Steel: The United States also recognizes the UK’s economic security measures to combat global steel excess capacity and will remove the 25% Section 232 tariffs on steel and aluminum and negotiate an alternative arrangement.
Reciprocal tariffs: The 10% reciprocal tariffs the United States imposed the UK on April 2, 2025 remain in effect.
Additional Measures
Trump stated that the deal will increase access for U.S. beef, ethanol, and agricultural products. Trump also announced that the UK “will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products. As part of the agreement, the UK will purchase $10 billion in Boeing airplane parts.
According to a White House fact sheet, the trade deal:
Includes access for more than $700 million in ethanol exports and $250 million in other agricultural products, like beef;
Commits the countries to work together to enhance industrial and agricultural market access;
Closes loopholes and increases U.S. firms’ competitiveness in the UK’s procurement market;
Ensures streamlined customs procedures for U.S. exports;
Establishes high standard commitments in the areas of intellectual property, labor, and environment;
Maximizes the competitiveness and secures the supply chain of U.S. aerospace manufacturers through preferential access to high-quality UK aerospace components;
Creates a secure supply chain for pharmaceutical products.