Broader Impacts of the US-UK Trade Deal

16th August 2025

While most of us who do not work in the bioethanol industries the affects are widespread on food and fuels. Perhaps we all need to get a better look at the other affects that are coming under the UK/USA Trade Deal.

US tariffs on UK-manufactured cars and parts have been cut from 27.5% to 10% under the deal, lowering export costs and improving competitiveness of UK vehicles in the US market.

A residual 10% baseline tariff still applies to most goods, so benefits hit only a subset of models and components covered by the agreement.

Aerospace and Advanced Engineering
Exemption from US aerospace tariffs protects high-value exports—jet engines, airframe parts and avionics—and safeguards approximately 200,000 UK aerospace jobs in regions like the West Midlands and North Yorkshire.

Maintains UK leadership in defence supply chains by preventing a 10% surcharge on technical and military-grade components.

Steel and Aluminium
Despite initial hopes, the executive order implementing the deal did not lift the existing 25% US tariffs on UK steel and aluminium, leaving metal-intensive sectors under strain.

Wales and Yorkshire & the Humber, which together employ half of the UK's 37,000 steelworkers, gain no immediate relief, perpetuating regional economic pressures.

Agricultural and Food Exports
Duties on UK beef exports to the US have been reduced under the deal, offering fresh market opportunities to British cattle and lamb producers.

Quota complexities and stringent US sanitary-phytosanitary rules mean volume gains could be modest in the first 12-18 months.

Goods Trade Volumes
In June 2025, UK goods exports to the US fell to £3.9 billion—the lowest in over three years—despite the trade deal coming into force at month's end, highlighting lagged effects of earlier tariff hikes.

Quarter-on-quarter, exports to the US were down 13.5%, suggesting that full recovery will depend on clarity around steel/aluminium relief and broader economic conditions.

Services and Investment
The Economic Prosperity Deal is not a comprehensive free-trade agreement and excludes services, leaving financial, legal and professional-services firms to trade under existing WTO rules with no new tariff or barrier reductions.

Investment flows in tech, biotech and green energy may nonetheless benefit from the deal’s signalling effect, but regulatory alignment remains limited.

Legal and Political Uncertainty
The deal’s tariff cuts rest on executive orders rather than a binding treaty; ongoing litigation over the Trump administration’s IEEPA-based tariffs could reverse or alter key provisions if courts strike them down.

With potential Supreme Court review looming, businesses face an ambiguous horizon for planning long-term US market strategies.

These effects illustrate that while the deal delivers wins for flagship sectors like automotive and aerospace, significant gaps—especially on steel, aluminium and services—mean its broader economic impact may be muted without further negotiation or a full FTA.