What’s in Newly Signed UK Trade Deal? – Full Texts of White House & UK Terms Outlines

At the G7 Summit in Canada yesterday, President Trump and UK Prime Minister Keir Starmer signed a trade deal between the U.S. and UK. It’s called the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal. But that’s a mouthful, so I’ll just refer to it as the UK Trade Deal or “the trade deal” for the purpose of this post.

The White House published a fact sheet on the trade deal, and the UK published the deal’s general terms. The texts of both are printed in full below. First, here are a few interesting points for shippers that stand out to me:

10% Baseline Tariff Remains in Effect

President Trump has made it clear that he wants the 10% baseline tariff to remain in place on goods imported from U.S. trade partners. It’s an incredibly large revenue generator for the U.S., but it’s also something some trade partners have been vocal about wanting to reduce or eliminate. The Trump Administration managed to keep it in the UK Trade Deal while also having Prime Minister Starmer happy about the deal.

Alternative Steel & Aluminum Tariff

The Trump Administration has made a special point about steel and aluminum tariffs being undermined by exemptions for various trade partners. Thus, one of the first – if not the first – tariff move President Trump made in his second term was establishing a 25% tariff on steel and aluminum across the board, removing exemptions from countries. Now, those 25% steel and aluminum tariffs are about to double to 50%.

President Trump seemed firm on not giving trade partners exemptions, as country’s like China could potentially move steel and aluminum through those countries to still dump in the U.S. market. Recognizing “economic security measures taken by the UK to combat global steel excess capacity,” the Trump Administration is giving the UK a special deal on steel and aluminum.

Lower Tariff for First 100,000 Automobiles

The UK will also get an alternate deal on automobiles than is currently in place. The first 100,000 automobiles imported to the U.S. from the UK will be subject to the 10% baseline tariff. After that, imported autos from the UK will be under a 25% tariff.

U.S. Exports to the UK Bolstered

The deal is designed to increase U.S. exports to the UK. Non-tariff barriers on U.S. goods entering the UK are to be reduced or removed. These changes appear to be an ongoing work in progress with cooperation between the U.S. and UK governments. U.S. goods are to get streamlined customs procedures in the UK, and there’s a commitment for $700 million in ethanol exports from the U.S. to the UK and $250 million in other agricultural products, such as beef.

Retroactive to May 8th

The UK’s general terms document on the trade deal states, “This document becomes operative on May 8, 2025.” That would indicate a retroactive nature to the deal with things like tariff changes applying to imports and exports going back to early last month.

Now, let’s give you the full details the countries released on the UK trade deal, starting with the full text of the White House’s fact sheet on the deal….

Fact Sheet: U.S.-UK Reach Historic Trade Deal

ESTABLISHING A NEW PARADIGM FOR OUR SPECIAL RELATIONSHIP: Today, on the 80th anniversary of Victory Day for World War II, President Donald J. Trump and Prime Minister Keir Starmer announced a historic trade deal, providing American companies unprecedented access to the UK markets while bolstering U.S. national security. This is a great deal for America.

• President Trump: “The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol, and virtually all of the products produced by our great farmers.”
  • “The UK will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products.”
  • “This is now turning out to be, really, a great deal for both countries.”
• Prime Minister Starmer: “This is going to boost trade between and across our countries. It’s going to not only protect jobs, but create jobs, opening market access.”
• This trade deal will significantly expand U.S. market access in the UK, creating a $5 billion opportunity for new exports for U.S. farmers, ranchers, and producers.
  • This includes more than $700 million in ethanol exports and $250 million in other agricultural products, like beef.
  • It commits the countries to work together to enhance industrial and agricultural market access.
  • It closes loopholes and increases U.S. firms’ competitiveness in the UK’s procurement market.
  • It ensures streamlined customs procedures for U.S. exports.
  • It establishes high standard commitments in the areas of intellectual property, labor, and environment.
  • It maximizes the competitiveness and secures the supply chain of U.S. aerospace manufacturers through preferential access to high-quality UK aerospace components.
  • It creates a secure supply chain for pharmaceutical products.
• The reciprocal tariff rate of 10%, as originally announced on Liberation Day, is in effect.
• The United States will agree to an alternative arrangement for the Section 232 tariffs on UK autos.
  • Under the deal, the first 100,000 vehicles imported into the U.S. by UK car manufacturers each year are subject to the reciprocal rate of 10% and any additional vehicles each year are subject to 25% rates.
• The United States also recognizes the economic security measures taken by the UK to combat global steel excess capacity and will negotiate an alternative arrangement to the Section 232 tariffs on steel and aluminum.
  • This deal creates a new trading union for steel and aluminum.
• This U.S.-UK trade deal will usher in a golden age of new opportunity for U.S. exporters and level the playing fields for American producers.
• Today’s action also sets the tone for other trading partners to promote reciprocal trade with the United States.

A FRAMEWORK TO BOLSTER ECONOMIC SECURITY: President Trump continues to advance the interests of the American people, enhancing market access for American exporters and lowering tariff and non-tariff barriers to protect our economic and national security.

• On April 18, President Trump had a call with Prime Minister Starmer to discuss our bilateral trade relationship.
• U.S. total goods trade with the UK was an estimated $148 billion in 2024.
• The UK average applied agricultural tariff is 9.2% while the U.S. average applied agricultural tariff (prior to April 2) was 5%.
• The UK maintains certain tariff and non-tariff barriers that restrict market access and create an unfair playing field for American workers and businesses.
  • For example, the UK imposes tariffs that can exceed 125% on meat, poultry, and dairy products on top of maintaining non-science-based standards that adversely affect U.S. exports.
• On April 2, 2025, Liberation Day, President Trump imposed a 10% tariff on all countries to address unfair trade practices that have contributed to America’s trade deficit and imbalances in order to better protect American workers and our national security. 

A MILESTONE IN ADVANCING AN AMERICA FIRST TRADE POLICY: Since Day One, President Trump challenged the assumption that American workers and businesses must tolerate unfair trade practices that have disadvantaged our workers and businesses for decades and contributed to our historic trade deficit.

• Reversing these conditions and addressing the lack of reciprocity in America’s trade relationships will bring about a new Golden Age and Make America Great Again.
• President Trump continues to advance the interests of the American people, enhancing market access for American exporters and lowering tariff and non-tariff barriers.
• The Economic Prosperity Deal with the United Kingdom is a critical step forward in a special relationship to promote reciprocal trade with a key ally and partner.

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Now here’s the full text of the UK’s general terms it published on the deal….

GENERAL TERMS FOR THE UNITED STATES OF AMERICA AND THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND ECONOMIC PROSPERITY DEAL

Context and Objectives

President Donald J. Trump and Prime Minister Sir Keir Starmer committed to deliver shared prosperity for American and British citizens alike. Our governments have a unique opportunity to enhance our economic partnership through the U.S.-UK Economic Prosperity Deal (EPD).

A first of its kind, the United States and the United Kingdom expect the EPD to address three core objectives, based on fairness and reciprocity:

1. To grow the quality and volume of mutually beneficial trade between the United States and the United Kingdom, creating good, high-paying jobs and growth in both countries;
2. To remove barriers to make it easier for American and British businesses to operate, invest and trade in both countries; and
3. To ensure that the Special Relationship is rooted in an enduring economic partnership that is fair, reciprocal, future-facing, and built on a shared vision of the challenges that face our economies.

This document serves to define the general terms for the EPD that set forth the shared desires of the United States and the United Kingdom to make bilateral trade fairer, easier, and more substantial. Alongside this document covering our trading relationship, we are continuing discussions toward a transformative technology partnership between our countries.

The United States and United Kingdom are immediately beginning negotiations of the EPD to develop and formalize the proposals made in this document. Once the initial proposals have been formalized and implemented, the United States and United Kingdom understand that the EPD can further be expanded over time to cover additional areas. Each country intends to continue to improve market access under the EPD.

Both the United States and the United Kingdom recognize that this document does not constitute a legally binding agreement.

1. Addressing Tariffs
   
   (a) Following a reasonable period of negotiation: (i) the United Kingdom intends to reduce its applied tariff rates on a preferential basis on a range of originating goods of the United States in sectors of importance to the United States; and (ii) the United States intends to reduce its applied tariff rates on a preferential basis on a range of originating goods of the United Kingdom in sectors of importance to the United Kingdom. The countries intend to coordinate the timing of their respective tariff reductions to be as soon as practicable, taking into consideration their respective domestic processes. On request of the United Kingdom, the United States will consider reducing its applied tariff rates for a UK territory or territories for whose international relations the United Kingdom is responsible on a preferential basis.
   
   (b) U.S. beef exports to the United Kingdom are currently subject to a 20 percent tariff within a quota of 1,000 metric tons (mt). The United Kingdom will remove the 20 percent tariff. Additionally, the United Kingdom will create a preferential duty-free quota of 13,000 mt for U.S. beef. In return, the United States will reallocate to the United Kingdom 13,000 mt of its existing “Other Countries” tariff rate quota (TRQ) for beef. Additionally, the United Kingdom will offer a preferential duty-free TRQ of 1.4 billion liters for U.S. ethanol.
   
   (c) The United States intends to provide certain key UK imports with modified reciprocal tariff treatment, based on our balanced trading relationship and shared national security priorities. Any such modifications will be consistent with those shared national security priorities, including priorities identified in future U.S. Section 232 investigations.
   
   (i) The United States will create a quota of 100,000 vehicles for UK automotive imports at a 10 percent tariff rate, and an accompanying arrangement for attendant auto parts for such autos.
   
   (ii) The United Kingdom will work to promptly meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities. Understanding the United Kingdom will meet these requirements, the United States will promptly construct a quota at most favored nation (MFN) rates for UK steel and aluminum and certain derivative steel and aluminum products.
   
   (iii) Contingent on the findings of the U.S. Section 232 investigation on pharmaceuticals and pharmaceutical ingredients, and consistent with the United Kingdom’s compliance with the supply chains security requirements described in subparagraph (ii), the United States and the United Kingdom intend to promptly negotiate significantly preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients. The United Kingdom confirms that it will endeavor to improve the overall environment for pharmaceutical companies operating in the United Kingdom.
   
   (iv) In addition to products already addressed in this document, the United States and the United Kingdom intend to adopt a structured, negotiated approach to other sectors that may be subject to Section 232 investigations or other tariff measures with a view to a significantly preferential outcome. Any such approach is contingent on the United Kingdom ensuring the security of supply chains, using appropriate measures, of products intended for export to the United States and on the findings of related U.S. investigations of, or other tariff measures related to, such sectors.
   
   (d) To ensure U.S. and UK firms can benefit from these changes in practice, both countries intend to apply rules of origin that maximize bilateral trade and prevent non-participants from using our bilateral arrangement to circumvent tariffs. The United States affirms that it intends to take into consideration during the negotiations of the EPD the United Kingdom’s request that the United States continues to work to lower tariffs on UK goods imposed by U.S. executive authority as well as those subject to Congressional approval.
   
2. Addressing Non-Tariff Barriers
   
   (a) The United Kingdom and the United States plan to work constructively in an effort to enhance agricultural market access. Further, both countries positively support future discussions to strengthen bilateral agricultural trade. The United Kingdom and the United States affirm that imported food and agricultural goods must comply with the importing country’s sanitary and phytosanitary (SPS) standards and other mutually agreed standards. The United Kingdom and the United States commit to working together to improve market access for agricultural products, to highlight concerns, and to increase agricultural cooperation on areas such as certain export verification programs to facilitate greater trade, and more formal bilateral engagement through international standard setting bodies.
   
   (b) The United Kingdom and the United States each confirms its intent to accord to conformity assessment bodies of the other treatment no less favorable than that it accords to conformity assessment bodies located in its own territory. Treatment under this paragraph includes procedures, criteria, fees, and other conditions relating to accrediting, approving, licensing, or otherwise recognizing conformity assessment bodies.
   
   (c) Both countries intend to build on an existing set of Mutual Recognition Agreements (MRAs) by negotiating additional agreements, as appropriate, across certain industrial goods and advance toward an agreement on services domestic regulation.
   
   (d) The United Kingdom and United States intend to discuss the principles and criteria used in order to recognize a standard as an international standard. The United Kingdom and the United States will further commit to discuss respective applicable standards for mutually agreed sectors of interest and, within those specified sectors, to agree which of the other’s relevant domiciled standards development organizations (SDOs) currently meet recognized international principles.
   
3. Increasing Digital Trade
   
   (a) Both countries confirm that they will negotiate an ambitious set of digital trade provisions that will include within its scope services, including financial services.
   
   (b) Both countries confirm that they will negotiate provisions on paperless trade, pre-arrival processing, and digitalized procedures for the movement of goods between our countries.
   
4. Strengthening Alignment and Collaboration on Economic Security
   
   (a) Both countries intend to strengthen cooperation on economic security, including by coordinating to address non-market policies of third countries.
   
   (b) Both countries intend to cooperate on the effective use of investment security measures, export controls, and ICT vendor security, building on the current levels of close alignment on trade and investment security measures.
   
   (c) In order to ensure more competitive, reciprocal, and secure access to our procurement markets, both countries reaffirm their procurement commitments under the Agreement on Government Procurement (GPA) and their respective free trade agreements, and intend to discuss the implementation of our respective procurement commitments, including through the United Kingdom’s new National Security Unit for Procurement and the United Kingdom’s new powers under the Procurement Act 2023, which provides that non-“treaty states” are not guaranteed nondiscriminatory treatment in procurement.
   
   (d) Both countries confirm that they will negotiate as part of the EPD provisions on duty evasion customs cooperation to combat evasion schemes and the illegal transshipment of goods from countries subject to antidumping, countervailing duties, safeguards, etc., which undermine economic security.
   
5. Commercial Considerations and Opportunities
   
   Both countries commit to continuing to identify mutually beneficial goods, services, investment opportunities and commercial transactions that serve to increase economic integration in critical industries and defense preparedness, leveraging government policies, licenses, and programs and private-sector participation to facilitate such transactions.
   
6. Other Matters
   
   (a) Both countries confirm that they intend to discuss high-standard commitments related to intellectual property rights protection and enforcement, labor practices (including addressing forced labor in supply chains), and environmental policies and practices.
   
   (b) The United Kingdom will consider the interests of those UK territories for whose international relations it is responsible.
   
   (c) The United Kingdom and the United States recognize that the purpose of this arrangement is to deepen our trade relationship based on mutual trust and a shared commitment to fair and reciprocal trade. On request of either country, the United Kingdom and the United States will consult with a view to considering any changes that may need to be made to this arrangement to ensure that it remains mutually beneficial.
   
   (d) The United States or the United Kingdom may terminate this arrangement by giving written notice to the other. The United Kingdom and the United States further plan to discuss procedures for review and termination as part of the negotiations of the EPD.
   
   This document becomes operative on May 8, 2025.