{"id":149469,"date":"2025-05-10T10:43:05","date_gmt":"2025-05-10T17:43:05","guid":{"rendered":"https:\/\/www.lankaweb.com\/news\/items\/?p=149469"},"modified":"2025-05-10T10:43:05","modified_gmt":"2025-05-10T17:43:05","slug":"what-is-in-the-uk-us-tariff-deal","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2025\/05\/10\/what-is-in-the-uk-us-tariff-deal\/","title":{"rendered":"What is in the UK-US tariff deal?"},"content":{"rendered":"

Business reporter, BBC News<\/em><\/span><\/h2>\n\n\n

The UK and the US have reached a deal over tariffs on some goods traded between the countries.<\/p>\n\n\n\n

President Donald Trump’s blanket 10% tariffs on imports from countries around the world still applies to most UK goods entering the US.<\/p>\n\n\n\n

But the deal has reduced or removed tariffs on some of the UK’s exports, including cars, steel and aluminium.<\/p>\n\n\n\n

Here’s an at-a-glance look at what’s in the deal.<\/p>\n\n\n\n

This isn’t a trade deal<\/h2>\n\n\n\n

Trump declared on social media this announcement would be a “major trade deal” – it’s not.<\/p>\n\n\n\n

He does not have the authority to sign the type of free-trade agreement India and the UK finalised earlier this week – this lies with Congress.<\/p>\n\n\n\n

Congress would need to approve a trade agreement, which would take longer than the 90-day pause in place on some of Trump’s tariffs.<\/p>\n\n\n\n

This is an agreement which has reversed or cut some of those tariffs on specific goods.<\/p>\n\n\n\n

It is only the bare bones of a narrow agreement, there will be months of negotiations and legal paperwork to follow.<\/p>\n\n\n\n

Car tariffs cut to 10%<\/h2>\n\n\n\n

Trump had placed import taxes of 25% on cars and car parts coming into the US on top of the existing 2.5%.<\/p>\n\n\n\n

This has been cut to 10% for a maximum of 100,000 UK cars, which matches the number of cars the UK exported last year.<\/p>\n\n\n\n

But any cars exported above that quota will be subject to a 27.5% import tax.<\/p>\n\n\n\n

Cars are the UK’s biggest export to the US – worth about \u00a39bn last year.<\/p>\n\n\n\n

Jaguar Land Rover, which exports almost a quarter of its cars to the US, said the deal “secures greater certainty for our sector”.<\/p>\n\n\n\n

But car industry leaders have told the BBC the quota could effectively put a ceiling on the number they can export competitively.<\/p>\n\n\n\n

The UK currently imposes a 10% levy on US car imports, but it is not clear if there is any change to this.<\/p>\n\n\n\n

The US has previously demanded the tax be cut to 2.5%, and Chancellor Rachel Reeves had indicated she is open to such a cut.<\/p>\n\n\n\n

Trump also announced that Rolls-Royce engines and plane parts will be able to be exported from the UK to the US tariff-free.<\/p>\n\n\n\n

No tariffs on steel and aluminium<\/h2>\n\n\n\n

A 25% tariff on steel and aluminium imports into the US that came into effect in March has been scrapped.<\/p>\n\n\n\n

This is good news for firms such as British Steel which was brought under government control as it struggled to stay operational.<\/p>\n\n\n\n

However, the White House said it would impose a quota on the “most favoured nation rates for UK steel and aluminium and certain derivative steel and aluminium products.”<\/p>\n\n\n\n

It is currently unclear how much of these products the UK will be able to export to the US under this quota system without paying more.<\/p>\n\n\n\n

It is also unclear whether the scrapping of tariffs will apply to steel derivative products and whether only steel melted and poured in the UK will benefit.<\/p>\n\n\n\n

The UK exports a relatively small amount of steel and aluminium to the US, about \u00a3700m in total.<\/p>\n\n\n\n

However, the tariffs also cover products made with steel and aluminium, including things such as gym equipment, furniture and machinery.<\/p>\n\n\n\n

These are worth much more, about \u00a32.2bn, or about 5% of UK exports to the US last year.<\/p>\n\n\n\n

Industry body Steel UK said there were “a number hoops to jump through before the UK steel sector can see the benefits of this deal”.<\/p>\n\n\n\n

It said firms needed to know what supply chain conditions need to be met, what the quotas are and when they take effect.<\/p>\n\n\n\n

Pharmaceuticals still the big unknown<\/h2>\n\n\n\n

What will be agreed on pharmaceuticals is still unknown with the UK saying work would continue on this and the remaining reciprocal tariffs.<\/p>\n\n\n\n

The US said both countries would “promptly negotiate significantly preferential treatment outcomes on pharmaceuticals”.<\/p>\n\n\n\n

Pharmaceuticals are a major export for the UK when it comes to US trade \u2013 last year sales of these products were worth \u00a36.6bn making it the UK’s second-biggest export to the US.<\/p>\n\n\n\n

It’s also America’s fourth biggest export to the UK, valued at \u00a34bn last year.<\/p>\n\n\n\n

Most countries, including the US, imposed few or no tariffs on finished drugs, as part of an agreement aimed at keeping medicines affordable.<\/p>\n\n\n\n

The president has not announced any trade restrictions on medicines yet.<\/p>\n\n\n\n