On 8th May 2025, the UK and US announced their new trade agreement, promising a new era for both nations. The new UK-US trade deal, announced on 8th May 2025, is a targeted effort to ease trade tensions between the two nations. The agreement delivers relief to specific sectors with tariff reductions and improved market access to key industries, resulting in economic gains and positive international trade relations. Both Prime Minister Keir Starmer and President Donald Trump have declared the agreement a positive milestone in their relationship. 

A particularly exciting development for the UK is the substantial reduction in tariffs on car exports to the US. These tariffs will see a significant decrease from 27.5% to a much more manageable 10% on up to 100,000 vehicles annually. This agreement will allow British carmakers to restart sales to the American market. Major manufacturers like Jaguar Land Rover have suspended US shipments after Trump’s initial tariff announcements, but the new deal has reassured workers across the sector. In addition, the UK has agreed to purchase $10 billion worth of Boeing aircraft, improving ties in the aviation sector. 

The UK and US reached a Trade Agreement on 8th May 2025

Trump’s 25% tariffs on steel and aluminium will be axed entirely, boosting the sector massively. This positive news comes after the government took control of British Steel to prevent closure. With the new trade deal, the steel sector is experiencing a wave of positive growth. 

Across the Atlantic, the United States will enjoy enhanced access to the UK's dynamic markets for agricultural products, including premium beef and ethanol. The complete removal of tariffs on ethanol is expected to unlock significant export opportunities for American producers, potentially reaching hundreds of millions of dollars. Importantly, this progress is achieved while maintaining the UK's unwavering commitment to its high food safety standards, ensuring consumers continue to benefit from established regulations on hormone-treated beef and chlorine-washed chicken.

The deal also saw the Digital Services Tax (DST) left unchanged. The DST imposes a 2% tax on revenues earned by large digital companies, including US firms like Amazon, Meta, and Google, from UK users. The two nations have agreed to continue discussions to work on a new deal that will benefit both countries. 

Adding to the positive momentum, the US has pledged to grant the UK 'preferential treatment whatever happens in the future' regarding any further import taxes. This assurance, combined with the immediate economic and political advantages of the current agreement, signifies a powerful step towards smoother international trade and holds the exciting potential to facilitate even greater trade with our partners in the European Union. This landmark US-UK agreement paints a promising picture for a thriving economic and political future for both our nations.

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