Following the initial announcement of a trade deal between the United States and United Kingdom on May 8, an executive order issued by the White House yesterday moved forward in implementing various components of the deal.
When this was initially announced in May, the U.S. Department of Commerce labeled it a “historic trade deal-providing unprecedented access to the U.K. markets while bolstering U.S. national security.” And it added that, “the trade deal will usher in a golden age of new opportunity for U.S. exporters, establishing a long-sought level playing field for American producers,” with yesterday’s executive order expands U.S. market access, with a focus on strengthening national security and economic alliances with the U.K.
“The deal includes billions of dollars of increased market access for American exports, especially for beef, ethanol, and certain other American agricultural exports,” stated President Trump in the executive order. “In addition, the United Kingdom will reduce or eliminate numerous non-tariff barriers that unfairly discriminate against American products, hurt the United States’ manufacturing base, and threaten the national security of the United States.”
Key components of this deal outlined in the executive order include:
- a tariff-rate quota (TRQ) of 100,000 U.K.-made automobiles is established and subject to a reduced 10% total tariff (instead of the standard 25%), quotas exceeding this limit will still face full tariffs, and certain automotive parts from the U.K. will also qualify for the reduced 10% tariff if used in U.K.-made vehicles;
- U.K. aerospace products covered under the WTO’s Civil Aircraft Agreement will no longer face tariffs imposed under previous executive actions and proclamations;
- the U.S. will design future TRQs for U.K. steel and aluminum products (and derivatives), provided the U.K. meets security and ownership standards outlined in the deal, and products beyond these quotas will still face existing tariffs;
- the U.S. and U.K. will work toward preferential treatment for U.K. pharmaceuticals and ingredients, contingent on a national security investigation and compliance with supply chain standards; and
- both countries commit to structured negotiation to address U.S. national security concerns in sectors subject to future trade investigations, and a shared effort will also be made to strengthen aerospace and aircraft manufacturing supply chains with tariff-free bilateral trade
The executive order also stated it allows for necessary regulatory updates and rules by the Secretary of Commerce in coordination with other agencies and clarifies that the order doesn’t create enforceable legal rights and is subject to budget and legal constraints.
A White House fact sheet stated that U.S. goods trade was an estimated $148 billion in 2024. And it added that the U.K. average applied agricultural tariff is 9.2%, with the U.S. average applied agricultural tariff, prior to April 2, was 5%. It also observed that the U.K. maintains certain tariff and non-tariff barriers that restrict market access and create an unfair playing field for American workers and businesses. As an example, it noted how the U.K. 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.
