UK-US Tariff Deal Targets Cars, Steel, and Pharmaceuticals

The United States and United Kingdom plan to establish a tariff reduction agreement which targets particular products instead of a comprehensive trade deal that needs Congressional approval. President Trump described the agreement as a “major trade deal” although it will preserve the 10% basic tariff on UK imports while reducing the 25% tariffs on cars and steel and aluminum products. The 100,000-vehicle quota for UK car exports worth £9 billion annually would receive 10% tariffs while steel and aluminum exports valued at £700 million could obtain zero tariffs. The United States aims to secure improved market access for pharmaceuticals (£6.6 billion in UK exports) and technology products. The United Kingdom plans to reduce its 10% car import tax to 2.5% and might lower its 2% digital services tax on US tech companies which generated £360 million. The steel industry warns that maintaining current tariffs would lead to sector collapse while cheap steel would flood other markets through redirected imports. The agreement omits modifications to food standards because it maintains UK-EU policies regarding hormone-treated US beef. The agreement requires multiple months of negotiations to complete the final details.