Implications of the U.S.-U.K. Trade Agreement for Businesses

What should businesses take away from the May 8th U.S.-U.K trade announcement and what should they do moving forward?

On May 8th, the U.S. and the U.K announced a trade agreement that reduces some of the tariffs the United States imposed on the U.K. and provides some U.S. agriculture exporters access to the U.K. market. Let's take a look and what was announced and what businesses should be focusing on moving forward.

1) Negotiations with the U.K. will continue - The Administration did not announce a final agreement. It released "General Terms" of an agreement and noted that additional topics can be addressed moving forward. This means the specific terms will evolve and businesses have a chance to influence the outcome.

2) Political and market pressure played a role - President Trump and PM Starmer both saw an upside in making an announcement. In the U.S., markets, and Members of Congress on both sides of the aisle are concerned about the impact of the Administration's tariffs on prices/supplies and the ensuing effect on businesses (small and medium in particular), jobs, and inflation.

While the announcement garnered significant attention, the terms announced are modest: U.S. concessions on steel/aluminum tariffs, U.K. concessions on U.S. beef/ethanol exports, 10% universal tariff remains, thornier issues excluded, e.g., Digital Services Tax on tech firms and the U.K. ban on hormone-treated beef.

3) What businesses should be focusing on:
Make your voice heard - USTR and the Administration continue their negotiations with many countries ahead of the end of the 90-day pause on the "reciprocal tariffs." (This is in addition to potential talks on the tariffs applied on Chinese imports.) Businesses need to engage in these negotiations to influence the outcome. For example, Vietnam is a big exporter to the United States, particularly in machinery, equipment, electronics, and apparel, and those imports face a potential 46% tariff. USTR Ambassador Greer recently met with his Vietnam counterpart and companies that rely on these imports will be impacted by these negotiations.

As someone who worked in Congress and for USTR, I know it is important to share your story and explain how these tariffs and negotiations can affect your business.

For more information on how to engage in this process, please feel free to reach out.