U.S.-UK Reach Historic Trade Deal
Trade Update • May 9, 2025
n a landmark step toward renewed economic cooperation, President Donald J. Trump and Prime Minister Sir Keir Starmer have formally announced their intent to develop and implement the U.S.-U.K. Economic Prosperity Deal (EPD)—a first-of-its-kind agreement aimed at unlocking a new era of fair, reciprocal, and future-oriented trade between two of the world’s largest economies.
Fact Sheet: U.S.-UK Reach Historic Trade Deal
Shared Vision for Economic Growth
The EPD, though not legally binding at this stage, outlines a strategic blueprint for transforming the U.S.-U.K. trade relationship. The agreement is anchored on three core objectives:
Expanding Bilateral Trade: By increasing both the quality and volume of mutually beneficial trade, the deal seeks to create high-paying jobs and economic growth across the Atlantic.
Removing Barriers: Streamlining operations for American and British businesses by reducing tariffs, eliminating regulatory hurdles, and facilitating easier cross-border investment.
Deepening the Special Relationship: Establishing an enduring economic partnership grounded in fairness, shared democratic values, and coordinated responses to global economic challenges.
Tariff Reductions and Preferential Access
A cornerstone of the EPD is its focus on reciprocal tariff reductions:
Beef and Ethanol Access: The U.K. will eliminate its 20% tariff on U.S. beef and establish a new 13,000 metric ton duty-free quota, while offering duty-free access for 1.4 billion liters of U.S. ethanol. In return, the U.S. will reallocate quota space to ensure balanced market access.
Automotive Sector: U.K. vehicle exports to the U.S. will be capped at 100,000 vehicles per year under a 10% tariff. Imports above that threshold will face a 25% tariff. An accompanying arrangement will govern parts associated with these vehicles.
Steel, Aluminum & Pharma: The U.S. will establish MFN-based quotas for U.K. steel and aluminum, conditional on British compliance with new supply chain security standards. These same standards will enable preferential treatment for pharmaceutical products, contingent on future findings under the U.S. Section 232 investigation process.
The reciprocal 10% tariff rate—originally established on Liberation Day—will remain in effect as a foundational feature of the EPD’s fair-trade structure, delivering billions in new tariff revenue to the U.S. Treasury.
Combating Non-Tariff Barriers and Facilitating Market Access
The EPD will also address long-standing non-tariff barriers that have constrained U.S. exporters:
Agricultural Access: Both countries commit to aligning sanitary and phytosanitary standards, strengthening export verification programs, and deepening cooperation in agricultural trade policy.
Conformity Assessment & Industrial Goods: Mutual recognition of product testing and certification bodies will be expanded, supported by new MRAs and work toward harmonized standards in key industrial sectors.
Digital Trade Expansion: Negotiations will include provisions on digital services, financial services, paperless trade, and digital customs processes—critical for modernizing U.S.-U.K. commercial activity.
Strengthening Economic Security and Investment Resilience
Recognizing shared national security interests, the EPD outlines new collaborative measures:
Addressing Non-Market Policies: Coordinated actions will counter the effects of non-market economies, particularly through aligned investment security and export control measures.
Supply Chain Integrity: Both countries will enforce strong requirements around the origin and integrity of supply chains for steel, aluminum, pharmaceuticals, and other critical sectors.
Procurement Cooperation: The U.K.’s new National Security Unit for Procurement and the Procurement Act 2023 will play a central role in ensuring U.S. suppliers receive fair treatment in British procurement processes. Both sides reaffirm their GPA commitments.
Combatting Tariff Evasion and Enforcing Trade Laws
In a forward-looking measure, the U.S. and U.K. will negotiate customs cooperation mechanisms to address:
Illegal transshipment,
Evasion of anti-dumping or countervailing duties, and
Circumvention of safeguard measures.
This enforcement agenda ensures that only qualified participants benefit from the deal, maintaining its integrity.
A Platform for Continued Commercial Growth
The EPD is designed to be dynamic. As its foundational elements are formalized, both governments commit to expanding the deal to cover additional industries and commercial sectors. A joint commitment is made to:
Encourage cross-border investment in critical industries, including defense and energy.
Address key priorities such as intellectual property enforcement, labor practices, and environmental sustainability.
Engage in future consultations to evolve the agreement and ensure it remains mutually beneficial.
U.S. Exporters to Reap Major Gains
The deal is poised to open over $5 billion in new export opportunities for American farmers, ranchers, and producers, especially in sectors that have faced entrenched U.K. barriers. These include:
Ethanol, beef, animal feed, and tobacco
Fruits, vegetables, and shellfish
Chemicals, textiles, and pharmaceuticals
Statements
“This deal marks a new era in our relationship with the United Kingdom, our great ally,” said Secretary Lutnick. “More importantly, this deal opens up an enormous multibillion-dollar export opportunity for hardworking Americans. While groundbreaking, this deal is the first of many as President Trump continues to deliver on his promises to the American people.”
With the U.S.-U.K. Economic Prosperity Deal, both nations are charting a bold new course toward deeper integration, shared resilience, and equitable growth. As negotiations begin in earnest, the EPD promises to transform the economic and geopolitical contours of the transatlantic alliance for decades to come.
How GHY Can Help
GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.
By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.
Contact Us Today! gts@ghy.com, or call +1 (800) 667-0771.
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