David Hooper, Managing Director of Hooper & Co international trade consultancy, reflects on the changes for UK businesses thanks to the implementation of key factors in the UK-US trade agreement.
Important elements of the UK-US Economic Prosperity Deal signed last month are now taking effect, including tariff reductions and preferential quotas for major UK sectors.
The government’s update on the UK-US Economic Prosperity Deal confirms that several of the headline measures – including tariff relief for car exports and US beef market access – are now moving into the implementation phase, marking a turning point in what has been a challenging transatlantic trade landscape in recent months.
The deal, which offers a huge boost for UK exporters in certain sectors like automotive, aerospace, and agriculture, was first unveiled in May during a high-profile Oval Office meeting between Prime Minister Keir Starmer and President Donald Trump.
We are now seeing the first tangible implementation of the agreement. With plenty to consider over the coming months, and further negotiations underway in some areas, here are some of the most important points for firms to consider.
The key question for UK exporters is whether your products qualify for these preferential rates.
Unlike simply shipping from the UK, these benefits require genuine UK origin – meaning significant manufacturing or processing must occur in Britain.
Companies should audit their supply chains now to ensure they can demonstrate UK origin when required, as US customs enforcement is becoming increasingly stringent.
One of the headline measures is the reduction of tariffs on UK car exports to the US. A new quota has been introduced, allowing for up to 100,000 UK-built vehicles to enter the US market each year at a reduced tariff of 10%, down from the previous 27.5%.
For UK car manufacturers and their supply chains, this represents a significant competitive advantage over EU rivals who still face the full 27.5% tariff. Companies should review their US market strategies now – this preferential access could justify increased investment in US-focused production lines or marketing efforts.
This will be administered quarterly and also extends to UK part exports when shipped in connection with completed vehicles.
The UK will also introduce a new duty-free quota for US beef of 13,000 metric tonnes per year, alongside the removal of tariffs on 1,000 metric tonnes of US beef imported under the existing WTO quota shared with Canada.
While this primarily benefits US exporters to the UK, British food manufacturers using US beef as an ingredient will see reduced input costs. More importantly, the commitment to maintaining UK SPS standards protects our producers’ continued access to both US and EU markets – avoiding the regulatory fragmentation that could have locked UK agriculture out of major export destinations.
Importantly, the agreement reaffirms that all agricultural goods must continue to meet the importing country’s sanitary and phytosanitary standards – meaning UK food safety and welfare rules remain intact, which is key for maintaining EU market access.
In the energy sector, the UK will create a preferential duty-free quota of 1.4 billion litres per year for US ethanol imports, with legislation now moving through Parliament to bring this change into effect.
The US has confirmed it will lower tariffs on aerospace goods from the UK to Most Favoured Nation (MFN) levels.
UK aerospace companies now have a clear cost advantage over competitors from countries still facing higher tariffs. This is particularly significant for smaller suppliers who can now price more competitively when bidding for US contracts, potentially opening doors that were previously closed due to tariff-inflated pricing.
The agreement also outlines shared ambition to secure preferential terms for UK pharmaceutical exports and other products that may be affected by existing tariff measures, while negotiations are ongoing to create quotas for UK steel, aluminium and related products, with both sides indicating these provisions will be finalised as soon as possible.
Additionally, it promises additional progress in other sectors affected by the wider tariffs, including Section 232.
Our expert team at Hooper & Co is working with clients across a range of sectors to help them understand how these changes affect their market access, pricing strategies, and compliance obligations – and what they need to look out for moving forward – including the all-important proof of UK origin.
UK businesses still face significant tariff and regulatory barriers in many areas, and a close eye should be kept on how the broader agreement evolves in the months ahead.
The full update can be found here: https://www.gov.uk/government/publications/us-uk-economic-prosperity-deal-epd/update-on-the-uk-us-economic-prosperity-deal-epd-web-accessible-version
To speak to a member of our team about your trade situation, get in touch: https://www.hooperandco.com/contact/