US and UK Strike Agreement
The US and UK Strike Agreement: As part of a new bilateral agreement, the US has agreed to cut import taxes on a fixed number of British cars and let some steel and aluminium into the country tax-free.
As part of a new bilateral agreement, the US has agreed to cut import taxes on a fixed number of British cars and let some steel and aluminium into the country tax-free.
The announcement provides some respite to the major UK industries from some of the new tariffs that President Donald Trump has ordered in the wake of his return to the White House in January.
But it will have an effect of maintaining a 10% till, on most goods from the UK.
1,500 tonnes per year of corn were cut off, though what the leaders of the two nations were hailing as important, the analysts noted, had not meaningfully changed the terms of trade between the countries as they had been before the changes made by Trump this year.
On Thursday, there was no formal deal signed with both governments, making only light announcements.
Sir Keir Starmer, speaking from a Jaguar Land Rover factory in the West Midlands, called the agreement a “fantastic platform”.
He made the remarks, adding that “the UK has no greater ally than the United States”, this historic deal delivers for British business and British workers, protecting thousands of British jobs in key sectors including car manufacturing and steel,” he said.
Trump branded it a “great deal” at the white house and fought back against criticism that he exaggerated its significance.
“This is a maxed-out deal that we’re going to make bigger”, he said.
What’s in the deal?
The two sides noted that the US agreed to lower the import tax on cars, which Trump increased by 25% last month, to 10% for 100,000 cars within a year.
That will benefit firms like Jaguar Land Rover and Rolls-Royce that build luxury cars, but may hold growth back in years to come, as it is only about what the UK exported last year.
Business Secretary Jonathan Reynolds told the BBC the UK was on the verge of losing thousands of jobs at carmakers under threat of US tariffs.
“This was very serious,” he said. “It would have meant the people would have lost their jobs without this breakthrough.”
Trump’s earlier this year imposition of tariffs on steel and aluminium, at 25%, has also been reduced, according to the Prime Minister’s office. The US instead indicated it would put up a quota as it had done earlier.
The two countries also, according to the documents released by the US Trade Representative, agreed to permit the import of a maximum of 13,000 metric tonnes of beef from the trading partner country without any taxes.
The US claimed that the change would significantly increase its sales of meat to the UK, which had previously been subject to 20% duties and limited to 1000 metric tons.
Overall, the US claimed the deal would create a $5 bn, £ 3.8 bn, “opportunity” for exports, including $700m in ethanol and $250m in other agricultural products.
“But it cannot be overstated how important this deal is,” said the US Agriculture Secretary, Brooke Rollins.
What’s the reaction?
UK Steel director-general Gareth Stace welcomed the agreement and said it would “provide major relief to the steel sector”.
“This UK government’s cool-headedness and getting its way in negotiations bore fruit,” he said.
Other business groups showed greater uncertainty.
It’s better than yesterday, but it’s not better than five weeks ago,” said Duncan Edwards, chief executive of BritishAmerican Business, representing firms from the two countries and advocating free trade.
I’m trying to be excited, but I’m struggling a bit.
Meanwhile, Opposition parties demanded more detail and scrutiny from Parliament on the deal that was praised by Labour MPs.
Conservative Party leader Kemi Badenoch has attacked the deal, which she has said is equivalent to tariffs being reduced by the UK, but increased in the US.
“This is not even a historic deal with the US,” she added. “We’ve been shafted.”
The Liberal Democrats called for a vote in Parliament on the deal, asserting it would demonstrate “complete disrespect to the public’’ if MPs were not allowed to participate.
Sir Ed Davey said: When it comes to any trade deal – and particularly one with somebody this unreliable like Donald Trump – the devil will be in the detail.
“There is one certain thing – Trump’s trade tariffs are still hitting America’s key British industries, threatening the livelihoods of people all across the UK.”
Leader of Reform UK, Nigel Farage, said the deal was a “step in the right direction”.
He told the BBC there was more detail, but the round was a welcome development.
“The important point is we are doing things, we are taking a move,” he said. It’s a Brexit benefit that we were able to do this.
Win for US ranchers?
The US and the UK have been negotiating a trade deal since Trump’s first appointment. At the time, they nearly signed a mini-agreement.
But the US has long lobbied for changes to favor its farmers and pharmaceutical interests, which had effectively been non-starters politically for the UK.
It remained unclear how far advanced those issues had been.
The agreement in principle announced by the National Cattlemen’s Beef Association was a “tremendous win” for American ranchers, but the US Meat Export Federation, which represents farmers in the US that face trade barriers, reported it was still trying to get information about what the changes were.
There would be no relaxation in food standards for imports, the UK said.
Although the UK seems to have offered some commitments, “the devil will be in the details,” said Michael Pearce, deputy chief economist at Oxford Economics, which said that it was making no change to its economic forecasts because of the announcement.
Other issues loom.
TRUMP has repeatedly claimed that he wants the US to tax imports of pharmaceuticals to have a strong base of manufacturing in critical medicines in the US.
The UK claimed that the US agreed to offer British firms “preferential treatment”.
But Ewan Townsend, a lawyer at Arnold & Porter – who advises health care firms – said that the industry was “now left waiting to see exactly what this preferential treatment will mean”.
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