Trump's eagerness for grand spectacles and an anticipated encounter with the King might enhance UK trade agreement... as steep increases in car and beef prices become imminent
The US-UK Economic Prosperity Deal (EPD), announced in May 2025, is making steady progress and is expected to be finalized by early September 2025. This deal aims to reduce or remove tariffs on key sectors such as automobiles, steel, aluminum, and agricultural products, with a focus on establishing a bilateral trade agreement to facilitate stronger economic ties.
Current Status of Negotiations
The UK and US began formal negotiations immediately after announcing the EPD on May 8, 2025, to develop and finalize the proposals in a binding agreement. There was an initial U.S. deadline to conclude the deal by July 9, 2025, related to tariff exemptions on steel and aluminum, but this deadline appears flexible with current targets moving toward early September 2025 to finalize bilateral deals, according to U.S. Treasury officials.
Tariffs
President Trump enacted a 25% tariff on all imported cars starting April 3, 2025, and on key auto parts starting May 3, 2025 (including engines, transmissions, electrical systems). However, the UK received a reprieve, with a 100,000 quota for UK auto imports like Jaguars, Land Rovers, and Mini Coopers that get a 10% tariff. On the other hand, a 10% baseline tariff for imports of products has been set, replacing the previous 10% baseline.
The steel and aluminum tariffs on UK-origin products currently stand at 25%, with broader tariff frameworks including reciprocal and stacking exceptions, meaning some goods subject to multiple tariffs are exempt from overlapping tariffs.
Digital Services Tax (DST)
While the EPD negotiations are understood to encompass wider economic and technological security issues, no specific concessions or changes regarding the DST have been reported as of July 2025.
Agricultural Products (Chicken and Beef)
The trade deal aims to reduce tariffs on agricultural products such as chicken and beef, key sectors for US exporters to the UK market. However, detailed policies on chicken and beef tariffs or quotas were not specified in these reports.
Additional Considerations
The EPD is notably not a comprehensive free trade agreement but rather a modular and strategic trade alignment focused on economic security rather than full liberalization. The International Emergency Economic Powers Act (IEEPA) tariffs, used in prior protectionist measures, may be challenged legally, potentially influencing terms but the EPD’s tariff framework is crafted separately and should remain in place regardless of such rulings.
The president will hold talks with British Prime Minister Keir Starmer at Trump's Turnberry golf course regarding a trade deal. The text of the deal states that products must comply with the importing country's sanitary and phytosanitary (SPS) standards and other mutually agreed standards. Trump wants the UK to get rid of its digital services tax and has managed to press Canada to nix its Digital Services Tax. The trade deal between the US and the UK will cover a wide range of industrial and agricultural products.
As the negotiations continue, it is expected that the UK will try to lower Trump's Section 232 tariffs on steel and aluminum, while the US and UK agreed to work 'constructively' on enhancing market access for agricultural products, including US poultry and beef. The evolving geopolitical context emphasizes economic security and strategic interests, with the US leveraging trade policy to align with countries politically and economically friendly to Washington, sometimes at the expense of China and other rivals.
The UK tariffs on American spirits have had a significant impact on bilateral trade, with a 35% decrease in trade due to 'devastating' tariffs on Single Malt Scotch and American Whiskey. The US exempted British jet engines from special Section 232 tariffs, but there is still discussion on British pharmaceutical imports. Trump and Starmer are scheduled to meet during Donald Trump's September official state visit in the UK, where they will aim to refine the historic U.S.-U.K. trade deal announced in May. As of mid-week, Trump had fired off 25 trade letters, indicating ongoing negotiations.
- The US-UK Economic Prosperity Deal (EPD), announced in May 2025, is progressing well and is projected to be finalized by early September 2025.
- The deal aims to reduce or remove tariffs on key sectors, with automobiles, steel, aluminum, and agricultural products being the focus.
- The UK and US started formal negotiations on May 8, 2025, to finalize the proposals in a binding agreement.
- The initial U.S. deadline to conclude the deal by July 9, 2025, has shown flexibility, moving towards early September 2025 for bilateral deal finalization.
- President Trump enacted a 25% tariff on all imported cars in April 2025, and key auto parts in May 2025, although the UK received a 10% tariff quota for specific auto imports.
- A 10% baseline tariff has been set for all imports of products, replacing the previous 10% baseline.
- The steel and aluminum tariffs on UK-origin products stand at 25%, with some goods being exempt from overlapping tariffs.
- No specific concessions or changes regarding the Digital Services Tax (DST) have been reported as of July 2025.
- The trade deal aims to reduce tariffs on agricultural products, particularly chicken and beef, key sectors for US exporters to the UK market.
- The EPD is a modular and strategic trade alignment, focused on economic security rather than full liberalization.
- The International Emergency Economic Powers Act (IEEPA) tariffs may influence terms but will not affect the EPD’s tariff framework.
- Trump and Starmer are scheduled to meet during the UK's official state visit in September to refine the historic U.S.-U.K. trade deal.
- The text of the deal states that products must comply with the importing country's sanitary and phytosanitary (SPS) standards and other mutually agreed standards.
- Trump wants the UK to get rid of its digital services tax, as he did with Canada.
- The deal will cover a wide range of industrial and agricultural products.
- The UK is expected to negotiate lowering Trump's Section 232 tariffs on steel and aluminum.
- The evolving geopolitical context highlights economic security and strategic interests, with the US aligning with politically and economically friendly countries.
- The UK tariffs on American spirits have led to a 35% decrease in trade due to high tariffs on Single Malt Scotch and American Whiskey.
- The US exempted British jet engines from special Section 232 tariffs, but British pharmaceutical imports are still under discussion.
- Market access for agricultural products, including US poultry and beef, will be enhanced by the US and UK working constructively.
- The world of business has shown interest in the progress of the US-UK EPD, with implications for the manufacturing, retail, and automotive industries, among others.
- In the video news segments, industry experts discuss the potential impacts of the deal on finance, energy, aerospace, and real estate.
- The media has also covered the deal's influence on smartphones, smart home devices, gadgets, cooking appliances, and baking equipment, given its implications for lifestyle, food, and dining industries.
- In the realm of interior design, experts have opined on how the new deal might affect the import of furniture, textiles, and wearables.
- Moreover, travel and tourism sectors are eagerly awaiting news about deals-and-discounts, product-reviews, and adventure-travel as parts of the agreement.
- Food-and-drink businesses are optimistic about the prospects of expanding into the UK and US markets, considering the growth in beverages, farming, and global cuisines.
- Home-and-garden enthusiasts are hopeful about the future of home-improvement and sustainable living with the promise of new financing options, wealth-management opportunities, and private-equity investments.
- The deal's impact on relationships, family dynamics, and pets is uncertain, but politically, it reflects the stronger alliance between the US and the UK, aligning with Washington's strategic interests.
