Implementing a Historic Trade Deal: U.S.-U.K. Economic Prosperity Deal Takes Effect

Strategic Insights -

Yesterday, President Donald J. Trump signed an Executive Order implementing American commitments under the General Terms of the United States-United Kingdom Economic Prosperity Deal. This historic trade deal provides American companies unparalleled access to British markets while bolstering U.S. national security. The agreement includes billions of dollars of increased market access for American exports, especially for beef, ethanol, and certain other American agricultural products.

Key Takeaways:

  • The U.S.-U.K. trade deal will provide American companies with unprecedented access to British markets, increasing market access for American exports by billions of dollars.
  • The deal will reduce or eliminate numerous non-tariff barriers that unfairly discriminate against American products, harming the U.S. manufacturing base and threatening national security.
  • The U.S. and U.K. will negotiate preferential treatment outcomes for UK pharmaceuticals and pharmaceutical ingredients contingent on the findings of a Section 232 investigation.
  • The Executive Order addresses automobiles, aerospace, and steel and aluminum, providing specific tariff rates and regulations.
  • Automotive parts from the U.K. for use in U.K. vehicles will be subject to a total tariff rate of 10%.
  • Certain U.K. aerospace products will be exempt from tariffs, strengthening aerospace and aircraft manufacturing supply chains.
  • The deal will establish tariff-rate quotas for U.K. steel and aluminum products consistent with the General Terms of the Economic Prosperity Deal.
  • In 2024, the U.S. total goods trade with the U.K. was an estimated $148 billion.
  • The U.K.'s average applied agricultural tariff was 9.2%, while the U.S. average applied agricultural tariff (prior to April 2) was 5%.

Statistics:

  • Estimated $148 billion in U.S.-U.K. total goods trade in 2024.
  • U.K. average applied agricultural tariff: 9.2%.
  • U.S. average applied agricultural tariff (prior to April 2): 5%.
  • 10% tariff rate on automobiles for the first 100,000 vehicles imported by U.K. car manufacturers.
  • 25% tariff rate on automobiles above 100,000 vehicles per year.
  • 10% tariff rate on automotive parts from the U.K. for use in U.K. vehicles.
  • 10% tariff rate on certain aerospace products from the U.K. currently subject to tariffs.

Sources:

  • US Whitehouse: "President Donald J. Trump Signs Executive Order on United States-United Kingdom Economic Prosperity Deal"
  • MIL OSI USA News: "President Trump and Prime Minister Starmer Announce Historic Economic Prosperity Deal"
  • US Senate News: "U.S.-U.K. Trade Deal: A New Era of Prosperity for American Workers and Businesses"