While a broader free trade agreement remains a long-term aspiration, this initial deal provides immediate relief for key industries, signaling a commitment to strengthening economic ties. For global supply chain solution providers like Woodland Group, understanding this evolving landscape is crucial to helping customers capitalise on new opportunities.

Key Supply Chain Facts on the New US-UK Trade Deal

Tariffs and Market Access

• The US will maintain a baseline 10% tariff on most UK goods, while the UK will lower its tariffs on US goods from an average of 5.1% to an expected 1.8%. Details of which are yet to be fully released but expected to be focused on the following sectors/commodities:

• The deal removes the 25% US tariff on UK steel and aluminium, reducing it to zero, which is a major relief for UK metals exporters.
• For automobiles, the US will apply a 10% tariff on up to 100,000 UK vehicles annually; exports above this quota will face a 25% tariff. Previously, the US tariff was 27.5% on UK cars.
• The agreement includes matching steel and aluminium tariffs and quotas for both countries.

Agriculture and Food Standards

• The US gains new access to the UK market for agricultural products, including beef and ethanol. UK beef will have a tariff-free quota of 13,000 metric tonnes for export to the US.
• The US will have duty-free access to the UK bioethanol market, up to 1.4 billion litres.
• The UK will maintain its food safety standards.

Pharmaceuticals and Industrial Goods

• The agreement establishes a "secure supply chain" for pharmaceuticals, with both countries committing to negotiate preferential outcomes for medicines and pharmaceutical ingredients.
• The UK has pledged to improve the business environment for pharmaceutical firms, though details on tariffs for pharmaceutical imports are still being finalised.
• The US is stated to have secured a $10 billion purchase of Boeing aeroplane parts, supporting aerospace supply chains.

Other Notable Points

• The current deal is limited in scope, with many details on other sectors yet to be finalised.
• Economists and industry leaders expect the immediate impact on trade volumes to be modest, but the agreement is seen as a step toward deeper economic ties and long-term supply chain resilience.

Summary

The new US-UK trade deal delivers targeted tariff relief and expanded market access for key sectors like steel, automobiles, agriculture, and pharmaceuticals, while maintaining significant baseline tariffs on most UK exports to the US. It aims to streamline customs, secure critical supply chains, and set a precedent for future US trade agreements.

However, the deal’s scope is currently limited, with many details still under negotiation and the overall impact on supply chains expected to be incremental rather than transformative in the near term. We will continue to keep you informed of developments as they are released.

It's important to note that the country of origin when assessing applicable tariffs is based on the country of manufacture of goods and not on the origin of the shipment.

Have any questions you’d like to ask our specialist trade compliance teams at Woodland USA or UK? Please contact your local representative or info@woodlandgroup.com.

Woodland Group have been a specialist in Transatlantic supply chain, offering expertise in air, ocean and trade compliance solutions for almost 40 years. With our locations across the US and UK, we are excellently positioned to support your Transatlantic supply chain needs.