Good News About the U.S.–U.K. Trade Agreement: Key Updates for American Manufacturers & Exporters

Introduction

U.S.–UK Trade Agreement Context
In 2024, U.S. goods exports to the United Kingdom reached $79.9 billion, up 7.6% from 2023 ustr.gov. On May 8, 2025, Prime Minister Keir Starmer and President Trump announced an Economic Prosperity Deal (EPD)—a U.S.–U.K. Trade Agreement – landmark in-principle agreement to cut tariffs, streamline customs, and deepen regulatory cooperation ustr.govwhitehouse.gov.

Implementation hinges on U.S. presidential proclamation and UK instruments, – Good news for both sides signal imminent tariff reductions, especially on cars, beef, ethanol, steel, and aluminum.

Let’s dive in and take a look at the latest commitments and their real-world impacts on five top U.S. export sectors:
1. Agriculture
2. Automotive
3. Steel & Aluminum
4. Pharmaceuticals & Aerospace
5. Digital trade & services

Then we’ll review common provisions in a comparative tariff grid, implications for US & UK manufacturers , and Manufacturing International’s take on the U.S.–U.K. Trade Agreement.

1. Agriculture & Food Products in U.S and U.K.

• Tariff Cuts
  • UK to remove its 20% tariff on U.S. beef and establish a 13,000 mt duty-free quota, in exchange for reallocating part of the U.S. beef TRQ – according to whitehouse.gov.
  • UK to offer a 1.4 billion L duty-free quota for U.S. ethanol – according to details released by whitehouse.gov.
• Non-Tariff Measures Simplified
  • Both sides commit to streamlined customs procedures and mutual recognition of SPS certifications to reduce delays according to the US Treasury Dept ustr.gov.
• Impact
  • USTR projects an additional $700 million in U.S. ethanol exports and $250 million in other agricultural goods, creating a $5 billion new-export opportunity according to the US Treasury Dept ustr.gov.

2. Automotive Trade Between the U.S and U.K

• U.S. Tariffs on UK Cars
  • U.S. will create a 100,000-vehicle quota at a 10% tariff (down from 27.5%) for UK-origin cars, plus attendant parts according to whitehouse.gov. For the U.S.–U.K. Trade Agreement.
  • Implementation expected “within days,” pending U.S. proclamation—confirmed by UK Trade Secretary Jonathan Reynolds according to reuters.comtheguardian.com.
• UK Tariffs on U.S. Trucks & Parts
  • UK to reduce its applied tariff rates on select U.S. industrial vehicles and auto parts, coordinated with U.S. timing according to whitehouse.gov.
• Impact
  • A big plus for British (U.K) car exports to the U.S. (worth over £9 billion in 2024) will gain immediate cost relief, boosting competitiveness against Japanese and European models according to assets.publishing.service.gov.uk.

3. Steel & Aluminum Trade Agreement Between the U.S. and U.K.

• Reciprocal Cuts
  • U.S. to remove its 25% Section 232 steel and aluminum tariffs on UK-origin products once the UK meets U.S. “melted and poured” requirements according to whitehouse.gov
  • UK to lift its retaliatory duties on U.S. steel and aluminum.
• Ongoing Negotiations
  • Discussions continue around carve-outs for Tata Steel and British Steel, which face U.S. ownership and security concerns according to thetimes.co.uk.
• Impact
  • U.S. steel exports to the UK totaled $5.5 billion in 2024; tariff removal will help restore market share lost to EU and Asian competitors according to tradingeconomics.com.

4. Pharmaceuticals & Aerospace Trade Between U.S and U.K.

• Pharma Provisions
  • Contingent on U.S. Section 232 findings, both sides intend “significantly preferential treatment” for pharmaceutical ingredients and finished products according to whitehouse.gov.
• Aerospace Supply Chains
  • This trade agreement between the U.S. & U.K. ensures preferential access for U.S. aerospace manufacturers to high-quality UK components, bolstering joint defense and commercial aviation sectors according to ustr.gov.
• Impact
  • A nice win to the U.S. – U.S. pharma exports to the UK reached $6.6 billion in 2024; aerospace exports were $2.2 billion, both poised for further growth under reduced barriers according to assets.publishing.service.gov.uk.

5. Digital Trade & Services Agreement Between U.S. & U.K.

• Digital Standards
  • There are new Commitments to negotiate “ambitious” digital trade provisions covering data flows, e-commerce, and AI ethics per ustr.gov.
• Services Market Access
  • UK agrees to improve market access for U.S. legal, financial, and professional services; U.S. to consider streamlined licensing for UK service providers per whitehouse.gov. A nice win for the U.S.
• Impact
  • U.S. services exports to the UK grew to $61.2 billion in 2024 (up 8.4%); digital-trade enhancements will further reduce compliance costs per assets.publishing.service.gov.uk. This is a big assistance in reducing the non-trade barriers the U.S. has faced in the past and continues to face with the E.U.

Common Provisions & Regulatory Cooperation in the U.S. & U.K. Trade Agreement

1. Rules of Origin: Designed to prevent third-country circumvention and maximize bilateral content.
2. Conformity Assessment: Mutual recognition of accreditation procedures to minimize duplicated testing.
3. Labor, Environment & IP: High-standard commitments modeled on CPTPP provisions, ensuring modern safeguards.

Comparative Grid: Tariffs Between the U.S.⇄UK

Implications for the United States from the U.S. & U.K. Trade Agreement

• Trade Balance: U.S. goods trade surplus with the UK hit $11.9 billion in 2024, a 17.4% increase per ustr.gov.
• Jobs & Investment: Expanded market access supports high-value manufacturing and R&D jobs, especially in agribusiness, automotive, and aerospace.
• SMEs: Simplified customs and conformity rules lower non tariff barriers for small and mid-sized manufacturers and exporters.
• Consumers: Consumers in both the U.S. & U.K. will benefit from greater product choice and competitive pricing on cars, beef, pharma, and electronics.

Statistical Highlights

• U.S. exports to the UK grew 7.6% to $79.9 billion in 2024 ustr.gov.
• UK goods imports from the U.S. rose 6.0% to $68.1 billion in 2024.
• U.S. services exports to the UK reached $61.2 billion, up 8.4% assets.publishing.service.gov.uk.

Manufacturing International’s Take

This U.S.–UK trade agreement – deal marks a large transformative step toward a truly reciprocal, partnership between the 2 nations. By reducing tariffs, aligning regulations, and cementing digital-trade rules, both nations will benefit from & strengthen their “Special Relationship” for decades to come. For U.S. exporters – including farmers, software firms, auto manufacturers, etc. this means faster customs, resulting in being more competitive, lower costs, and improved opportunities.

More from Manufacturing International on the tariffs.

1. How Non-Tariff Barriers Quietly Undermine U.S. Manufacturers in Global Markets
2. Truth About Trump’s Tariffs: With 90-day Pause – Will They Reshape the U.S. Supply Chain or Just Raise Costs?
3. The VAT Trap: How Import VAT Puts U.S. Manufacturers at a Disadvantage in the EU Market

Sources & Further Reading

• USTR Fact Sheet: U.S.–UK Historic Trade Deal ustr.gov
• The White House: General Terms for the Economic Prosperity Deal whitehouse.gov
• Reuters: Britain Ready to Implement U.S. Tariff Deal reuters.com
• The Guardian: U.S. to Lower Tariffs on British Cars Within Days theguardian.com
• TradingEconomics: U.S. Exports to UK in 2024 tradingeconomics.com
• OEC World: U.S.–UK Trade in March 2025 oec.world
• USTR Press Release: Historic U.S.–UK Trade Deal Draws Praise ustr.gov
• White House Fact Sheet: May 2025 Trade Deal whitehouse.gov