The United States and the United Kingdom have signed a new trade agreement that reduces tariffs on key goods, aiming to strengthen economic and strategic ties between the two countries. Under the deal, U.S. tariffs on UK automobiles and steel will be lowered, while both countries will benefit from expanded access to each other’s agricultural markets. The agreement also enhances opportunities for U.S. businesses to enter the UK market more easily, reinforcing broader national security cooperation. The deal was announced on the 80th anniversary of Victory in Europe Day.
US President Trump stated, “This agreement provides billions of dollars in increased market access for American exports, particularly in agriculture—opening doors for American beef, ethanol, and virtually all products from our great farmers. The UK will eliminate or reduce many non-tariff barriers that have unfairly restricted American goods.” Meanwhile UK Prime Minister Keir Starmer, added, “This deal will boost trade between our countries, protect existing jobs, and create new ones by opening up markets and expanding opportunity.”
Here’s a quick overview of the key goods impacted by the agreement.
Automotive industry
One of the important aspects of the deal is its impact on the automotive industry. The United States has agreed to reduce tariffs on the UK made vehicles from the current 27.5% down to 10%, offering substantial relief to UK car manufacturers. Furthermore, the agreement introduces an annual quota allowing 100,000 UK vehicles to enter the U.S. market at the reduced rate.According to the fact sheet released by White House, any exports beyond this threshold will face a higher tariff of 25%, maintaining some protective measures for the U.S. auto industry.
Steel and aluminum
The deal also brings significant changes to tariffs on steel and aluminum. US will eliminate the 25% tariff currently levied on British steel exports. In return, the UK has taken steps to address global overcapacity in steel production, which had previously been a major concern for U.S. policymakers under Section 232 of the Trade Expansion Act. The agreement sets the stage for the creation of a joint “trading union” on steel and aluminum that seeks to ensure both fair pricing and stable supply chains. U.S. Commerce Secretary Howard Lutnick confirmed that the 10% base tariff would remain in place as a standard, but further punitive tariffs will no longer apply to UK exports.
Agricultural trade
The deal opens the UK market more broadly to American agricultural products. This includes $700 million in ethanol exports and $250 million in other key goods such as beef. On the UK side, British farmers have secured a tariff-free quota for 13,000 metric tonnes of beef exports to the U.S.
Aerospace and manufacturing
In a further boost to industrial trade, British companies will now be able to export aircraft parts to the United States without facing any tariffs. This opens up greater potential for UK firms involved in aerospace manufacturing. In a reciprocal move, the British government has agreed to a significant purchase of American aircraft, with a British airline set to buy $10 billion worth of Boeing planes. This exchange underlines the broader ambition of the deal to deepen supply chain integration across critical industries.
Cultural exports and further negotiations
Trump who had previously threatened tariffs on British films, remarked that future talks would cover the entertainment sector but jokingly assured that “James Bond has nothing to worry about.” In the meantime, negotiations will continue on outstanding issues, including reciprocal tariffs in the pharmaceutical industry and further enhancements to digital and services trade.
Meanwhile, both countries have framed the deal as a step toward reinforcing national security and economic resilience in the face of global instability. The U.S. has agreed to give the UK preferential treatment in any future trade actions under Section 232, which grants the U.S. president the authority to impose import restrictions based on national security concerns. From steel and cars to ethanol and beef, the agreement lays the foundation for deeper cooperation and increased economic opportunity on both sides of the Atlantic.