US-UK Economic Prosperity Deal Sparks Significant Tariff Changes Impacting Automotive, Steel, and Agricultural Sectors Podcast Por arte de portada

US-UK Economic Prosperity Deal Sparks Significant Tariff Changes Impacting Automotive, Steel, and Agricultural Sectors

US-UK Economic Prosperity Deal Sparks Significant Tariff Changes Impacting Automotive, Steel, and Agricultural Sectors

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 Listeners, welcome to United Kingdom Tariff News and Tracker, your essential update on the latest in UK-US trade and tariffs.

The big story this week is the formal implementation of the US-UK Economic Prosperity Deal, signed by President Trump and Prime Minister Starmer and seen by many as a landmark in transatlantic trade. According to the White House, as of June 16, 2025, both countries are acting on a framework that impacts everything from automobiles and steel to beef and digital services.

One major headline: President Trump has imposed a 10 percent “reciprocal” baseline tariff on most UK goods entering the US, effective since April 2, in a bid to address what he describes as unfair trade practices that contribute to the US trade deficit. This 10 percent tariff is now the universal baseline for most imports from all countries except China, Canada, and Mexico, who face different sets of tariffs. This rate is a significant jump—before these latest announcements, the average US tariff hovered around just 2.2 percent, though it was higher for some agricultural products.

For the UK’s critical automotive sector, there’s been a significant adjustment: while the standard tariff for imported cars was raised to 25 percent in March, there’s now an annual quota for 100,000 UK-made vehicles to enter the US at the combined 10 percent rate. Beyond that quota, the 25 percent tariff resumes. Automotive parts from the UK for use in UK-manufactured vehicles also receive the 10 percent rate, provided they fit within the new quota system. This arrangement is designed to support UK auto exports while still reflecting the Trump administration’s protectionist stance.

Steel and aluminum are also in focus. The US commits to negotiating an alternative arrangement for UK-origin steel and aluminum, potentially exempting a quota of UK exports from the Section 232 tariffs that currently stand at 25 percent on steel and 10 percent on aluminum. Both governments aim to create a new “trading union” for steel and aluminum, but no specific quota figures are yet agreed.

Agriculture is another big winner. The UK has agreed to remove its 20 percent retaliatory tariff on US beef and will set a quota for tariff-free American beef imports. Additionally, there’s a new UK preference for 1.4 billion liters of US ethanol.

Total US-UK goods trade was estimated at $148 billion in 2024, with the UK exporting over £59 billion in goods to the US—more than to any other single country. However, this new tariff landscape introduces uncertainty for businesses, as some elements of the deal remain non-binding and subject to further negotiation, especially around digital services. Notably, the future of the UK’s digital service tax—seen as discriminatory by the Trump administration—remains unresolved.

The overall average US tariff rate now sits at 15.8 percent, the highest since the 1930s. Analysts at The Budget Lab at Yale report this has already raised consumer prices by 1.5 percent in the short term and is expected to cost the average US household around $2,000 this year.

Listeners, thank you for tuning in to United Kingdom Tariff News and Tracker. Don’t forget to subscribe for the latest updates on tariffs and trade. This has been a quiet please production, for more check out quiet please dot ai.

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