UK-US Trade Deal Under Strain as Trump Threatens Changes
The UK-US trade deal, hailed as a historic diplomatic achievement when signed in May 2025, is now facing its most significant challenge yet. President Donald Trump has suggested the agreement could be "changed," criticizing Prime Minister Sir Keir Starmer for what he termed "tragic" errors regarding North Sea drilling and migration policies. This marks a souring of the relationship between the two leaders, casting doubt on the deal's future stability.
Key Provisions of the Agreement
The deal, the first of its kind struck by the US after President Trump's return to the Oval Office, offered the UK relief from tariffs on cars and steel in exchange for greater access for America's agricultural industry to British markets. However, implementation has been partial, with US tariffs on British steel not fully removed as agreed, piling strain on the industry.
Steel and Aluminium Tariffs
As part of the deal, the US agreed to remove the 25% tariff rate on UK steel and aluminium exports, reducing the trade barrier to zero. Despite this commitment, US tariffs on British steel have not been fully eliminated, creating ongoing challenges for UK exporters and undermining the anticipated benefits.
Car Tariffs
American tariffs on British cars were cut to 10% for the first 100,000 vehicles exported to the US, with parts for those cars receiving special trade treatment. This reduction from Mr Trump's initial 27.5% rate has not prevented a decline in exports; the value of car exports to the US fell by 28.1% to £7.5 billion, indicating broader market pressures beyond tariff adjustments.
Pharmaceuticals Agreement
In December 2025, the UK and US made a trade deal allowing America to import UK pharmaceuticals tax-free, while Britain committed to spending more on NHS drugs. Import taxes on medicines and treatments going to the US were set at 0% for three years. The Trump administration argued this would spur greater investment by UK drug companies in America and create jobs, following threats of up to 100% tariffs on branded drug imports.
Agricultural Access
Both nations promised new market access for agriculture. UK beef farmers gained entry to the US market for the first time, with a tariff-free quota of 13,000 metric tonnes, joining countries like Australia. In return, US farmers received new access to the UK, though Sir Keir insisted on maintaining farming standards. Concerns persist among British farmers about cheap US beef undercutting local produce and potential erosion of food safety standards.
Non-Tariff Measures and Omissions
The deal includes commitments to coordinate on economic security, address non-market policies of third countries, and enhance cooperation on digital trade and tax evasion. Notably, it excludes provisions on US access to the NHS or concessions on a 2% tax on US big tech companies, as clarified by Business Secretary Jonathan Reynolds.
Future Uncertainty
According to the terms, either side may cancel the deal with written notice, and details on review or termination will be discussed in negotiations. With President Trump's criticisms and threats of changes, the deal's long-term impact on the British economy remains uncertain, highlighting the fragile nature of international trade agreements amid shifting political dynamics.
