A new trade agreement between the United Kingdom and the United States has officially come into force, lowering tariffs on a range of goods and giving British industries increased access to the US market, BBC reports.
However, the deal leaves unresolved a key issue for UK manufacturers—ongoing tariffs on steel and aluminium.
Under the agreement, UK car manufacturers can now export up to 100,000 vehicles annually to the United States with a reduced 10% import tariff, a notable drop from the previous 27.5%. The UK aerospace sector is also set to benefit, with tariffs on its exports to the U.S. eliminated entirely.
UK Prime Minister Sir Keir Starmer described the deal as “historic,” saying it protects key sectors of the British economy. Business and Trade Secretary Jonathan Reynolds echoed this sentiment, estimating the tariff reductions will save industries hundreds of millions of pounds each year and support thousands of jobs.
In return, the UK has agreed to lift tariffs on US beef and ethanol imports. Up to 1.4 billion litres of American ethanol can now be imported into the UK tariff-free, while the cap on US beef imports has been raised to 13,000 tonnes. The British government has reassured the public that hormone-treated beef, commonly used in the US, will remain banned in the UK through certification and border control measures.
However, not all industries are welcoming the deal. The UK bioethanol sector warns that removing the 19% tariff on US ethanol will make it difficult for domestic producers to remain competitive against heavily subsidised American imports.
One of the most pressing issues remains unresolved: the 25% tariff on UK steel and aluminium exports to the United States. Without a new agreement by 9 July, these tariffs could rise to 50%, prompting concern within the British steel industry.
Liam Bates, UK managing director of Sheffield-based steel firm Marcegaglia, called the situation “frustrating” and a source of “massive uncertainty.” The company, which supplies materials from the UK to its US manufacturing site, could face substantial losses if higher tariffs are imposed mid-shipment.
“It gives us an extremely hard decision to make as to how we can continue production in the US,” Bates told the BBC.
US President Donald Trump, who reintroduced global tariffs in April, has not committed to extending the deadline for steel negotiations, though he has suggested in an interview that a short extension remains possible.
Meanwhile, the UK government has taken steps to shield its own steel market by tightening import safeguards. New limits will allow steel import quotas to rise by only 0.1% annually, down from 3%, amid concerns that rejected US-bound steel could be redirected to the UK and sold at discounted rates.
As global trade realigns, other countries, including Thailand and Canada, are also seeking revised terms with the United States. Canada recently dropped its proposed digital services tax in an effort to reopen trade talks with Washington.
