The leaders of the United States and the United Kingdom welcomed the commercial pact signed between the two parties on Thursday as a “historic”, but the experts warned that it still left the United Kingdom against higher prices on the United States than before Donald Trump takes office.
While the price of 10% in the world imposed by Trump in April remains in place, the United Kingdom has won significant concessions on steel and automotive price What Trump had increased by an additional 25% in February and March.
In return, the UNITED KINGDOM Admittedly in the United States a better access for beef, ethanol and industrial products, which causes the British market to be feared to be overwhelmed with American products.
British negotiators have avoided deviating in politically controversial fields, such as reducing the digital services tax of the United Kingdom, the opening of health markets to American companies or the modification of the rules of British food standards to allow products such as chicken in chlorine and beef treated with hormony.
Mattia Di Ubaldo, principal researcher in the international trade of the University of Sussex, said that the agreement had left the United Kingdom in “a clearly worse position” in its bilateral terms with the United States that a year ago-but now with a competitive advantage against certain other countries.
Economy
Economists have said that the agreement would bring relief to the most risky industries of prices, but would make no difference from the global economic perspectives of the United States or the United Kingdom. They suggested that the United States would also find it difficult to conclude significant agreements with other countries.
The limited relief of automotive and steel and aluminum prices “would nibble” the American effective rate rate, but the average price was to remain two -digit, hitting American consumers, Michael Pearce told Oxford Economics.
“We do not expect this to lead to a significant impact on the overall GDP of the United Kingdom,” said Peder Beck-Friis, economist at Pimco. “The current budgetary and (Bank of England) policy remains much more important engines of the prospects.”
Paul Dales, British economist at Capital Economics, said that the price of effective American import rate on the United Kingdom would be around 11% following the arrangement, much more than 1% that existed last year. It was an improvement compared to the 13% which preceded the agreement on Thursday, but which depended a lot on future American measures of critical sectors such as pharmaceutical products.
Cars
British car leaders largely hosted the agreement, which reduced a potential rate of 27.5% to 10% for the first 100,000 cars shipped from the United Kingdom.
The new quota represents almost all 101,870 vehicles exported to the United States last year, according to the Society of Motor Manufacturers and Traders.
“The application of these prices was a serious and immediate threat to British car exporters so that this agreement will bring essential help,” said SMMT director of SMMT Mike Hawes.
Adrian Mardell, Managing Director of Jaguar Land Rover, the largest car exporter in the United Kingdom in the United States, described the agreement as “significant progress” by offering “the certainty that we must continue to invest in the future”.
But he warned that “it is not the work done for the United Kingdom”, in the hope that future negotiations would reduce, over time, even more tariffs.
“It is not without challenges, but it is manageable,” said another leader.
Although the British automotive industry strongly depends on European exports, cars are the largest export article in the United Kingdom to the United States, representing sales worth 6.4 billion pounds sterling. It is also the largest market for high-end brands such as the JLR Range Rover as well as Bentley and McLaren, which have no manufacturing imprint in the United States.
Aerospace
The United Kingdom has also concluded an agreement that will allow Rolls-Royce to export its engines to the United States “without prices”, although managers have said that they always hoped that all aerospace parts would be exempt.
Rolls-Royce's actions increased 3.6% after the news. Meanwhile, the actions of the American plane manufacturer Boeing increased by 2.8% on Thursday after the United States Secretary of Commerce, Howard Lunick, said that a British airline was to buy $ 10 billion in the company. The owner of British Airway Iag ended Thursday evening on an agreement to buy Boeing 787 planes, people familiar with the agreement confirmed.
The aerospace industry, a large user of steel and aluminum, rushed to adapt to the Trump trade war, higher costs already filtering by its integrated supply chains.
Kevin Craven, director general of ADS, the aerospace and defense trade organization, said that if the American basic price of 10% “would remain in place, the elimination of additional steel and aluminum prices is a significant achievement”.
“The deleted elimination of prices on the engines and aerospace parts is also good news, although we expected other specific details,” he added.
Agriculture and food
Farmers have welcomed the British government’s commitment to maintain British food standards and guarantee reciprocal access for beef trade, but have warned that a flood of ethanol in the United Kingdom could strike farmers.
The White House said that the agreement “would considerably broaden” access to the US market in the United Kingdom, citing an opportunity of $ 700 million for ethanol exports and an opportunity of $ 250 million for other agricultural products such as beef.
“Our greatest concern is that two agricultural sectors have been distinguished to assume the heavy burden of the elimination of prices for other industries in the economy,” said Tom Bradshaw, president of the National Farmers Union British.
The NFU said that biofuels were “extremely important” for the United Kingdom Arable Cultures sector. “The full liberalization of our ethanol market could result in the loss of this profitable outlet for our arable producers,” he said. Bioethanol in the United Kingdom is produced mainly from interior wheat and imported corn.
Downing Street said the United Kingdom and the United States had agreed to the “reciprocal” market on beef, British farmers receiving a quota without a price of 13,000 metric tonnes.
The White House said that the United Kingdom had “unjustly” maintained prices up to and more than 125% on “meat, poultry and dairy products in addition to maintaining non-scientific standards that negatively affect American exports”.
Before Trump imposed its coverage rate at 10%, the United States applied an average agricultural rate of 5%on British imports, while the average price of the United Kingdom was 9.2%.
The federation of food and drinks, the industry lobby for food manufacturers, said that the 10% rate would still affect British food exporters, many of which are small businesses. The industry sent 2.7 billion pounds sterling of goods to the United States in 2024.
Steel
A few weeks after the British government intervened to save the last Hauts Fouris in the remaining steel of Great Britain, the industry praised the agreement to eliminate the prices for American exports as “extremely significant”.
In February, weeks after his entry into office, Trump had denounced an agreement between the United Kingdom and the United States, under former President Joe Biden and slapped the 25% prices on all British imports of steel and aluminum in the United States.
UK Steel, the commercial organization, stressed that a certain clarification of the terms of the agreement was still necessary, in particular if there would be chains attached to the steel to qualify for the zero tax percent, and when the change of the rules would enter into force.
The United States is the second steel export market in the United Kingdom after Europe. In 2024, the United Kingdom exported 180,000 tonnes of semi-finished steel and finished in the United States, worth 370 million pounds sterling. This represents 7% of total steel exports of the United Kingdom in volume and 9% per value.
Pharmacy
The United States has agreed to give the United Kingdom a preferential treatment on the prices imposed in the course of Washington in progress on the question of whether imports of pharmaceuticals and semiconductors threaten national security, said the United Kingdom.
Starmer praised the concession as a step that would protect the United Kingdom “whatever happens in the future” – a reference to the fact that Trump still plans to impose prices on pharmaceutical products.
The agreement also laid the foundations for a future technological partnership of the United Kingdom in which the United Kingdom could collaborate in sectors such as biotechnology, life sciences, quantum computer science, aerospace and space, added London.
The promises have raised hopes in the pharmaceutical industry that the worst impacts of Trump's future prices will now be avoided, although the sector remains cautious without further details.
“This is a good progress, but we just need to understand a little more about it,” said an industry figure. “All of this is added to a lack of clarity,” said another, pointing to the “positive framing”.
Report by Peter Foster, Kana Inagaki, Sylvia Pfeifer, Madeleine Speed, Michael Peel, Gillian Plimmer, Sam Fleming, Delphine Strauss and Philip Georgiadis in London and Andy Bounds in Brussels
