“ After years of uncertainty, especially post-Brexit, the removal of steel and aluminium tariffs could breathe new life into the British metals industry. And for car manufacturers, the reduced tariffs, though capped, give a clearer path to the US market.”
GARIMA SRIVASTAVA, LEGISLATION SENIOR ADVISER, THE CHARTERED INSTITUTE OF EXPORT & INTERNATIONAL TRADE
HISTORIC BUT IMPERFECT: A COMPROMISE DEAL WITH THE US Sir Keir Starmer hailed the deal reached with the US in May as “historic” and he was right in as much as it was the first agreement reached with Washington since President Trump imposed tariffs across the world on the occasion he labelled – with unintended irony, according to many – Liberation Day. Unfortunately, by the beginning of June, the confusion
surrounding the White House’s clampdown had been thrown into further confusion after a US federal court ruled that Congress, not the president, had exclusive powers under the constitution to regulate commerce with other nations. The ruling affected only the blanket, global tariff of ten per cent, apparently leaving industry- specific tariffs in place. Only weeks before the ruling, the US-UK Economic
Prosperity Deal (EPD) had been hailed as an agreement that would save thousands of manufacturing jobs in the UK, even though it was far from a free trade deal. The British enthusiasm stemmed mainly from the fact that the Americans reduced the tariff on British-made cars from 27.5 per cent to ten per cent (subject to a maximum quota of 100,000 vehicles per year) and abolished the 25 per cent tariff on UK exports of steel and aluminium products, subject to a quota still to be determined. Adrian Mardell, CEO of Jaguar Land Rover – which,
in April, suspended all exports to the US when the car tariff leapt to 27.5 per cent – said the firm “warmly welcomed the deal, which secures greater certainty for our sector and the communities it supports”. An economic security alignment also means zero
tariffs on jet engines and aerospace components imported into the US, but other UK exports will still be subject to the universal ten per cent tariff imposed by the White House. The two governments have also agreed to negotiate a digital trade agreement but the concessions so far made
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by the British to the US have caused concerns, not least the fact that US has trebled tariffs on the UK from the pre-Trump 3.4 per cent to ten per cent now, while the UK has cut its tariffs by two-thirds from 5.1 per cent to 1.8 per cent. Specific grievances centre on the zero duty rates that
will allow up to 13,000 tonnes of US beef into Britain a year (though UK rules banning hormone treated beef will remain, along with the outlawing of chlorinated chicken) and the abolition of the current 19 per cent tariff on ethanol. On beef, the National Farmers’ Union (NFU) applauded the protection of UK food standards in the deal, but condemned the level of access it granted US competitors. Tom Bradshaw, NFU president, said: “Our biggest concern is that two agricultural sectors have been singled out to shoulder the heavy burden of the removal of tariffs for other industries in the economy. “While we understand this, we also know that today
is the start, not the end, of a process and UK agriculture cannot continue to shoulder such imbalances in future negotiations.” On ethanol, a petrol substitute produced from
agricultural products, the leaders of the two companies that dominate the industry in Britain warned that they could collapse as a result of the deal. Paul Kenward, chief executive of ABF Sugar, and
Grant Pearson, chairman of Ensus, told The Times the deal posed “an existential threat” for the sector and put at risk hundreds of jobs at plants in NE England and Yorkshire. However, Garima Srivastava, legislation senior
adviser at the Chartered Institute of Export & International Trade said that, overall, the agreement represented “very welcome news” for UK exporters. “After years of uncertainty, especially post-Brexit, the removal of steel and aluminium tariffs could breathe new life into the British metals industry. And for car manufacturers, the reduced tariffs, though capped, give a clearer path to the US market,” she said. “Of course, the trade-offs on agricultural access and
digital taxes mean the UK is walking a fine line. But this deal signals a fresh momentum in transatlantic trade and businesses would do well to pay attention.” Ms Srivastava added that although “it is not a done
deal across the board, it is a strong signal that deeper cooperation could be coming”.
CAUTIOUS OPTIMISM IN THE GULF: GCC DEAL STILL IN LIMBO Although the UK government has branded a trade agreement with the six GCC nations (Saudi Arabia, the UAE, Qatar, Kuwait, Oman, and Bahrain) the “next deal” it will make, relatively little has emerged after three years of negotiations. These negotiations “have been going on for yonks so
we should be further on than we are now,” according to Edward Lister, co-chairman of the UK-UAE
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