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UK-US trade deal confirmed

The UK Government confirmed yesterday - on the 80th anniversary of VE Day - that the UK is the first nation to secure a trade deal with the new US administration.

Above: UK Prime Minister Sir Keir Starmer.
Courtesy gov.uk

More detail on the deal is yet to revealed but this is seen as a welcome development for UK advanced manufacturing, including the aerospace sector.

It is thought that this landmark economic deal with United States will save thousands of jobs for British manufacturing and the country's steel industry.

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This major trade deal – which follows the announcement of the India Free Trade Agreement (FTA) on Tuesday – includes the US slashing tariffs for UK carmakers, steelworks and farmers, protecting jobs and providing stability for exporters.

The UK-US FTA also takes the tariff on ethanol coming into the UK from the US – that is widely used in UK manufacturing – down to zero.

Prime Minister, Sir Keir Starmer, said: "The new global era demands a government that steps up, not stands aside.

"This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel.

"My government has put Britain at the front of the queue because we want to work constructively with allies for mutual benefit rather than turning our back on the world.

"As VE Day reminds us, the UK has no greater ally than the United States, so I am delighted that eight decades on, under President Trump the special relationship remains a force for economic and national security.

"This is jobs saved, jobs won but not job done and our teams will continue to work to build on this agreement.

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"My Government is determined to go further and faster to strengthen the UK’s economy, putting more money in working people’s pockets as part of our Plan for Change."

Business and Trade Secretary Jonathan Reynolds said: "I am delighted our calm approach and proactive engagement with the US has resulted in this deal which cuts tariffs for UK industry and cuts costs for businesses.

"Businesses across the country will be glad to see our approach working, but this is only the beginning. We look forward to strengthening our trading relationship with the US through a wider economic deal, which will help us to deliver on our Plan for Change to provide economic stability and make this country fit for the future."

Howard Lutnick, the US Commerce Secretary was reported to have said "we have agreed to let Rolls-Royce engines and those kind of plane parts, to come over tariff-free" and referring to an undisclosed UK airline being set to purchase "$10 billion worth of Boeing planes”.

Adrian Mardell, Chief Executive Officer, JLR said: "The car industry is vital to the UK’s economic prosperity, sustaining 250,000 jobs. We warmly welcome this deal which secures greater certainty for our sector and the communities it supports. We would like to thank the UK and US Governments for agreeing this deal at pace and look forward to continued engagement over the coming months."

Work will continue on the remaining sectors – such as pharmaceuticals and remaining reciprocal tariffs. But – in an important move – the US has agreed that the UK will get preferential treatment in any further tariffs imposed as part of Section 232 investigations. The deal opens the way to a future UK-US technology partnership through which our science-rich nations will collaborate in key areas of advanced technology, for example biotech, life sciences, quantum computing, nuclear fusion, aerospace and space.

The Digital Services Tax remains unchanged as part of the deal. Instead the two nations have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the US – opening the UK up to a huge market that will put rocket boosters on the UK economy.
 

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