What is Britain getting and what is it giving away in the UK-US trade deal?
8 May 2025, 15:04 | Updated: 8 May 2025, 15:43
It has been a good week for Britain - with not one but two trade deals
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It seemed as though Sir Kier Starmer had only just come off the back of huge post-Brexit win after striking a trade deal with India.
Just days later, it emerged that an even bigger agreement had potentially been struck.
Donald Trump said it was a “great honour” to have the UK be the first trade deal signed with the United States, claiming it will be “full and comprehensive”.
But what will Britain actually be getting and what will it be giving away?
British carmakers
The threat of 25pc tariffs to struggling British car manufacturers has been at the top of negotiators’ minds given the insudty has warned the measure could have “devastating” effects.
A trade deal with the US could lower this rate for an agreed quota of imports. This would help soften the blow and would likely be welcomed by companies including Land Rover and Jaguar who reap huge US revenue.
While the new tariff is not yet known, it will likely be seen as a huge win for the UK.
Around 25,000 jobs in the car industry were at risk from the 25% tariffs, hitting Britain’s industrial heartlands the hardest, according to the Institute for Public Policy.
The UK may in turn have to reduce tariffs on American car imports as it pays a price for the tariff.
A further £3 billion of products containing steel and aluminium are also subject to the higher tariff rate.
Read more: EU targets US aircraft and car exports in product hit list against Trump's tariffs
Steel and aluminium
The UK may avoid the worst of steel tariffs, which soared to 25% at the start of Trump's trade war in February.
The US sells around 200,000 tonnes of British steel a year, worth over £400m.
Britain’s aluminium sector has also warned the tariffs pose an existential threat, with 10% of its exports sold to the US for a value of £225m.
Food and agriculture
One key element of the trade agreement involves concessions on food and agriculture imports. For Britain, it could mean reduced levies on meat and shellfish products.
However, it comes amid concerns over US chlorinated chicken.
British ministers have previously ruled out accepting such controversial products, which also include hormone-fed beef.
US Secretary of Agriculture Brooke Rollins said the “major” deal with is “an agreement in concept,” adding that more details still need to be fleshed out.
She added that this will be "very, very good" for American farmers and "for our ranchers that have long suffered as we begin to realign.”
Services
Britain is expected to offer up its digital services as it scrambles to shield its manufacturing industry.
Currently the Digital Services Tax affects US tech giants including Google and Meta.
In 2020, the Government introduced a 2% tax on revenues from search engines, social media services and online marketplaces.
The measure brings in around £800m a year right into the Treasury's coffers.
Trump has previously likened digital taxes such as these to “overseas extortion”.
Last year, the UK sold £137bn of services to the US, making up for over a quarter of all exports of this kind.
Pharmaceuticals
Trump has not yet announced how his tariffs will impact foreign pharmaceutical companies. Britain’s biggest firms, including GSK and AstraZeneca, will be waiting to see how the announcement affects them.
The UK imported £8 billion of chemicals last year, about 12% of all chemical imports.
About half of that was made up of medicines and pharmaceuticals, like vitamins, antibiotics and vaccines.
Trump has said he will clarify what levies the sector faces in the coming weeks.
It comes after he launched an investigation into how these impacts affect national security at the start of April.
Imports
Machinery and transport equipment continued to be the main goods imports from the US last year, with the UK importing £20.1 billion of machinery and transport equipment.
The UK also imported £15.3 billion-worth of fuel from the US last year, a nearly one-fifth decrease compared with 2023.Crude oil was the main fuel import, at £8.7 billion.
Film tariffs
Trump again spooked the markets when he announced foreign film imports with tariffs of 100%.
The US plans “could deal a knock-out blow” to the UK film sector, the Broadcasting, Entertainment, Communications and Theatre Union (Bectu) warned on May 5.
Blockbusters including the Harry Potter and James Bond franchises, as well as streaming shows like Game of Thrones are filmed in the UK.
The UK Government has said it was in “active discussions” with the White House concerning these tariffs, culture minister Chris Bryant said on Wednesday.
