US & UK Trade Deal

On May 8, 2025, the United States and the United Kingdom cemented a new trade deal that is beneficial to both nations but certainly favors U.S. interests primarily—a fact that comes as no real surprise. U.S. President Trump, as all are aware, initiated major tariffs on trading partners worldwide to establish pressure for trade agreements. Naturally, his method is designed to upend the existing status quo, creating a more favorable dynamic for the land of the free. If any agreement simply favored each participant equally and induced a dynamic equal in balance to the prior, there would plainly be no incentive for the U.S. to bring those agreements about.

In a natural illustration of asymmetric power and diplomatic realism, the numerous discussions that arose solely from U.S. economic pressure have indeed yielded America-centric results, displayed by the new UK trade deal. Whether or not all applaud the method, America’s new utilization of its dominant economy as a bludgeon to extract desired deal terms has proven effective. Why? The U.S. is demonstrably more economically powerful than the world; any who deny this need only observe the host of formerly antipathetic nations capitulating one after the other.

Ultimately, whether by goodwill or necessity (it was the latter), UK Prime Minister Keir Starmer inked an accord with U.S. President Donald Trump, christened the Economic Prosperity Deal. According to the White House fact sheet, it provides “American companies unprecedented access to the UK markets while bolstering U.S. national security. This is a great deal for America” (White House). In a striking divergence from the briefings of the Biden Administration, the facts on this sheet are verifiably true, and they portray a major economic win.

Daniel S. Hamilton of the Brookings Institute, in what he may have considered a clever gambit, attempted to prove this deal flawed. He stated, “Washington refused to lower its 10% baseline tariff on UK products… their hit to UK exports is likely to be greater than any gains [for the UK]... Starmer might have stemmed the damage, but it’s still a net loss for the UK” (Brookings). Well, yes. Once again, a savvy observer sees that these deals will continue to be churned out on a global scale in favor of the U.S. The fact that the sixth-largest economy in the world (Worldometers) has now agreed to a trade deal with obviously imbalanced terms only legitimizes the realist perspective. Even the second largest economy, China, is now in conversations with America on tariffs.

Terms within the EPD are specific to particular industries, for the most part. However, the 10% reciprocal tariff, levied against the UK on a day that will certainly be memorialized one way or another, Liberation Day, remains in effect. For some goods, such as UK steel and aluminum, as well as Rolls-Royce engines and other critical aviation products, tariffs are now dropped. Such cancellations serve a double purpose. While they are, in part, offered in exchange for the massive benefits that follow, they are strategically allocated.

Trump intends to ramp up military development and produce new planes, specifically the NGAD F-47, C-17 Globemaster III, and KC-46 Pegasus, through contracts with Boeing—the long-awaited Air Force One replacement is an entirely separate conversation. These contracts logically become more affordable to the U.S. Department of Defense when tariffs on various component parts are lowered. Additionally, the aerospace and defense sectors will benefit from lowered costs of input and uninterrupted supply chains. While some tariff income is certainly lost as a result of the concessions, a significant portion of the tariff fee that U.S. firms no longer owe to the government will now become defense contract savings, minimizing the cost to the nation. Beyond cost considerations, U.S. aerospace manufacturers will receive preferential access to UK-made components.

Now, to the monumental benefits. In 2024, $2.1 billion of agricultural exports were sold from the United States to the UK. The new agreement will majorly amplify the volume of U.S. sales in that sector alone. Specifically, an additional $5 billion in new agricultural export opportunities are being made available—including “more than $700 million in ethanol exports and $250 million for other agricultural products” (FarmProgress). Various heads of U.S. agricultural interest groups have applauded the deal, citing the increased duty-free quotas and more level playing field.

The nearly six-year-old tariff of 19% on ethanol imports will be stricken from 1.4 billion liters of U.S. ethanol per year. In 2024, the U.S. exported $535 million worth of the product—the duty-free quota could increase that by 31% if fully exploited in this calendar year (DTNPF). Also, the removal of the tariff will save roughly $133 million in duties on that volume. This ethanol tariff was intended to protect the UK economy in the event of a no-deal Brexit—while a deal was ultimately secured with the EU, the UK left tariffs on non-EU nations for protectionist purposes.

The UK is also massively expanding its quota for exports from the U.S. beef industry. Previously, the allowance was a minimal 1,000 metric tons per year—this volume would feed about 33,000 Americans over a year, based on consumption patterns (USDA). UK residents consume at a slower rate, meaning that the same volume could feed roughly 50,000. But, as the population of Britain is above 68 million, it’s clear that the United States’ market share is negligible. Indeed, the U.S. in 2024 provided only 1,790 metric tons to the UK—0.74% of their beef imports. This frighteningly miniscule amount was due to the high tariffs imposed, such as a 20% tariff on the previous 1,000-ton quota, and strict regulations against hormone-treated products.

In light of such factors, the U.S. could not compete with nations like Ireland or the Netherlands, which benefit from UK-EU trade policies and have been much more strictly policed. Indeed, far too strictly so. In 2023, the Irish Agriculture Minister proposed culling 200,000 dairy cows to reduce methane emissions, which was a heinous idea on the minister’s account but most certainly a result of EU pressure (Dairy Herd). The magnitude of foolish agendas pushed by the EU and their plainly harmful impact on member nations highlight the benefits of Brexit for the UK in terms of sovereign independence.

Brexit is proving beneficial to the United States as well, in terms of direct dealing with Britain—the EPD sees the quota for U.S. beef raised to 13,000, a 1200% increase; additionally, the 20% duty is fully removed from the quota volume (Feedstuffs). Finally, both nations have committed to “work together to enhance industrial and agricultural market access” (White House Fact Sheet). In other words, the convoluted regulations that prevented the U.S. from utilizing the full quota in the past will be amended in our favor. Such an outcome would be nearly impossible if we were required to negotiate with the European Union.

Various Section 232 tariffs were imposed on the UK previously but will be largely eliminated as a result of this deal. In February 2025, Trump reimposed a sweeping 25% tariff on steel and aluminum imports, which he first placed in 2018. Excessive imports of such products, especially from China, had been weakening the domestic industrial base and causing an American overreliance on foreign steel. This permits an entirely justifiable Section 232 tariff, given that Chinese overcapacity and dumping are undeniably intended to undermine the economies and governments of other nations. To combat this, the U.S. has agreed to eliminate steel and aluminum duties for UK exports. In exchange, the UK will diligently work alongside America to combat global excess and dumping. Autos were also targeted under Section 232, but the relevant tariffs are now in line with the comprehensive 10% tariff on the UK for the first 100,000 British vehicles imported per year.

As a whole, the UK deal is a direct result of a monumental shift in America’s stance before the world. Where previously our nation has avoided wielding its economic power in such a manner, we are now making a stand against unfair market structures on the international scene. For an unbearably long time, America has acted as a worldwide nonprofit, allowing trading partners to get away with far too much. Unfair practices and regulations ensued, astronomical tariffs were implemented, and more, all by countries that rely on us—yet knew we would do nothing to stop them. Thankfully, these same arbitrageurs who treated the American government, perhaps justifiably, as a market inefficiency were potently surprised by last year’s election.

Things have changed, and the nations suffering from recent tariffs know full well that their bill has come around. That’s exactly why each and every country, regardless of bluster or public outrage, will come to the negotiating table just like the UK. America will continue to secure favorable terms and advance its interests domestically and worldwide—the Economic Prosperity Deal with the UK is but the frontrunner in what is sure to be a wave of U.S. trade wins. The much-feared recession that we were doomed to enter as a result of these tariffs—at least, according to the mainstream media—seems increasingly unlikely. In fact, the stock market is back to pre-tariff levels already. Whether America enters something all could christen a new “Golden Age” remains to be seen, but for now, the UK trade deal is a harbinger of many good things to come.

Sources

https://www.whitehouse.gov/fact-sheets/2025/05/fact-sheet-u-s-uk-reach-historic-trade-deal/

https://www.brookings.edu/articles/what-does-the-us-uk-deal-mean-for-trumps-trade-agenda/

https://www.worldometers.info/gdp/gdp-by-country/

https://www.farmprogress.com/farm-policy/us-uk-trade-deal-promises-5-billion-boost-for-american-farmers-focusing-on-beef-and-ethanol

https://www.dtnpf.com/agriculture/web/ag/livestock/article/2025/05/08/ethanol-beef-big-ag-winners-us-uk#:~:text=The%20U.S.%20exported%20%24535%20million,with%20the%20%24700%20million%20figure

https://www.ers.usda.gov/publications/pub-details?pubid=37389#:~:text=Beef%20is%20a%20highly%20consumed,pounds%20per%20person%20per%20year

https://www.dairyherd.com/news/business/ireland-proposes-culling-200-000-cows-help-meet-climate-goals-farmers-push-back

https://www.feedstuffs.com/policy/u-s-and-u-k-reach-agreement-on-trade?utm_source=chatgpt.com

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