UK Progresses Towards U.S. Auto and Steel Trade Agreement
The UK is on the brink of striking a sweet deal with the US – a revised trade agreement that could see President Donald Trump's tariffs on motor and steel exports significantly reduced, claims the Financial Times.
The 25% tariffs Trump imposed on steel and car imports earlier this year are reportedly set to be significantly cut in a deal this week. Sources suggest that the quotas on offer from the US are notably generous.
In response, the UK is offering several concessions. These include softening the digital services tax on big tech firms and reducing tariffs on US cars and agricultural products. However, negotiations have been delayed due to disagreements centered around the pharmaceutical sector. The UK has drawn a firm line, refusing to compromise on US food production standards, like accepting chlorine-washed chicken.
It's worth noting that prior to Trump's tariffs, the UK was exempt from import taxes on up to 500,000 tonnes of steel per year. But this agreement was scrapped under Trump.
The trade deal comes after the UK finalized a landmark free trade agreement with India, worth up to £25.5bn in bilateral trade, adding £4.8bn to the UK economy.
Trump's ambitious promise to secure "90 deals in 90 days" after pausing his sweeping tariffs is yet to materialize, as the administration struggles to reach several trade pacts. Trump himself admitted to reporters that "we don't have to sign deals." Despite this, Trump is expected to announce a deal with Europe, described as "as big as it gets," between Thursday and Monday.
Treasury Secretary Scott Bessent is due to hold talks with Chinese representatives in Switzerland this weekend, aiming for a conclusion. However, the focus of these talks is more on de-escalation rather than a substantial trade deal. Bessent suggested last night that the talks with China will help in de-escalation before moving forward.
- The UK economy might see an improvement due to the proposed reduction of taxes on motor and steel exports, as suggested by the Financial Times.
- In the UK's proposed trade agreement with the US, tariffs on US cars and agricultural products could be reduced, with the UK offering concessions on the digital services tax and softening its stance on tech firms.
- The UK has been reluctant to compromise on US food production standards, such as accepting chlorine-washed chicken, in the ongoing negotiations with the US.
- Trump's ambitious trading goals have not been fully realized, with the administration still negotiating several trade pacts, including a potential deal with Europe.
