Cars, steel, beef and films: the key points of the US-UK trade deal
The UK and US have announced a new trade deal, or at least some elements of it, following a slightly chaotic transatlantic speaker phone call between Keir Starmer and Donald Trump.So what does it involve – and what was left out? Here is what we know and don’t know.With Starmer heading to the Jaguar Land Rover plant in the Midlands to herald the announcement, this was expected to be a major part of the deal, and it is.Tariffs for UK cars imported into the US will be cut from 27.5% to 10%, up to a maximum of 100,000 cars a year, close to total exports last year.
This was, Starmer said, a “huge and important reduction” – even if it is capped, and still a tariff,US tariffs of 25% on steel and aluminium have been reduced to zero under the deal,This is relatively little in overall trade terms, comprising only about £700m a year,However, steel has a political resonance beyond its economic heft, with the UK government stepping in last month to take control of British Steel to prevent its Chinese owner shutting the Scunthorpe plant,The most potentially tricky area of the deal, not least due to concerns among UK voters – and farmers – about chlorinated chicken and hormone-fed beef.
The result was hailed by Downing Street as “a win for both nations”,As ever, the devil could be in the detail,Government officials said there had been no compromise on food standards, while the deal would open exclusive access for UK beef farmers to the US,However, it also includes £5bn worth of agricultural exports from the US to the UK, with the US agriculture secretary, Brooke Rollins, saying the deal would “exponentially increase our beef exports” to the UK,The National Farmers Union cautiously welcomed the proposals, but said that UK arable farmers could have concerns about the inclusion of large amounts of bioethanol imports from the US.
A White House guide to the deal which, while brief, gave more details than its Downing Street equivalent, listed a series of other, more specific agreements, including:“Streamlined” customs procedures for US imports to the UK.Preferential access to UK aerospace components for US manufacturers.Increased help for US firms with UK procurement.And now for areas where there was no news.Trump has been threatening tariffs on this, an important area of the UK economy, but it does not fall under the agreement – yet.
Trump’s commerce secretary, speaking after his boss, indicated that more could come: “It lays out the plan that you can work with us in autos, you can work with us with aero and commercial,You can work with us in pharmaceuticals,”The UK film industry reacted with horror to Trump’s promise this week to impose a 100% tariff on all movies “produced in foreign lands”, with predictions it could wipe out a business worth billions of pounds to the UK economy,There was no carve out for this in the US-UK deal – but this is not a surprise,To begin with, Trump’s announcement was just days ago.
Also, it was less a policy than a rant on social media, and it remains to be seen if it will be imposed, and if so, how.There had been speculation that Trump’s team would insist on concessions in one or both these areas as a price to reduce tariffs – which could have caused a big political storm.But answering questions in the Commons on the deal, Douglas Alexander, the trade minister, told MPs there had been no changes on either.
UK interest rates fall to 4.25% as Bank of England announces a quarter-point cut
Bank of England policymakers have cut interest rates by a quarter point to 4.25% to cushion the UK economy against the impact of rising economic uncertainty.The widely expected move from the Bank’s monetary policy committee (MPC), its fourth cut since last August, also carried a warning that the UK economy would slow by a further 0.3% over the next three years in addition to dramatic cuts to its forecasts made earlier this year.In a blow to the chancellor, Rachel Reeves, the MPC said a combination of uncertainty surrounding the impact of US trade policy on the global economy and clouds hanging over the outlook for the UK meant growth would be almost stagnant for the rest of the year
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The owner of British Gas has suffered a shareholder rebellion after handing its chief executive a multimillion pound pay packet while energy bill payers struggle with record levels of debt.Nearly 40% of Centrica’s shareholders voted against the board’s pay plans at the energy company’s annual investor meeting in Manchester on Thursday, after rising criticism of boss Chris O’Shea’s pay during the energy crisis.O’Shea’s basic salary rose 29% last year to £1.1m to take his total pay packet, including bonuses and share-related pay, to £4.3m for the year
Bank of England cuts interest rates to 4.25% and welcomes US-UK trade deal – as it happened
Bank of England governor Andrew Bailey has hailed the news that Britain and the United States are expected to announce a trade agreement in a couple of hours.He tells journalists at today’s press conference that the Bank has been following the issue very closely.Bailey says he hasn’t been briefed about the situation, and doesn’t know the content of the deal.But he says:We do now have news that suggests there will be an announcement, and we welcome that news.I very much welcome it, and I think it’s very well done to those involved
Mood-boosting rate cut is a fillip for Reeves but leaves future uncertain
Thursday’s interest rate cut to 4.25% is the fourth in a run of reductions that kicked off last August. It represents a fillip for Rachel Reeves, who will hope it helps revive the feelgood factor for gloomy British consumers.The Bank of England’s nine-member monetary policy committee (MPC) has passed judgment on the impact of Donald Trump’s trade war for the UK – and expects modestly weaker growth and inflation to be the result.Lower global energy prices as markets anticipate weaker demand, and cheaper Chinese imports, are likely to bear down on costs, the MPC has judged
BlackRock to order senior managers back to office five days a week – reports
BlackRock, the world’s biggest asset management company, is reportedly preparing to order its senior managers to work from the office five days a week.The New-York based company is expected to tell its staff as early as Thursday that about 1,000 managing directors around the world should work in the office full-time, the Financial Times has reported.BlackRock last told staff in 2023 they had to go into the office at least four days a week. More junior staff will still be allowed to work from home one day a week under the new guidance, according to the report.BlackRock, which has more than 21,000 staff around the world, is one of many big American corporations calling time on an era of remote and hybrid working triggered by the Covid-19 pandemic
EU targets US aircraft and car exports in new list of potential tariffs
The EU is considering imposing tariffs on US aircraft and car exports in a fresh attempt to persuade Donald Trump to drop his current and proposed tariffs against the EU.If acted on they will hit Boeing hard but also include further categories of US exports including chemicals, electrical equipment including cameras, health-related products and some foods such as sweet potato and nuts.At the same time Brussels has launched a consultation with member states on potential litigation against the US over the blanket 20% reciprocal tariffs the US president announced last month.As the EU prepared for the possibility of a prolonged transatlantic trade war, Trump reached an agreement with the UK and appeared to softened his position on China.The US treasury secretary, Scott Bessent, and Washington’s chief trade negotiator, Jamieson Greer, are due to meet China’s vice-premier, He Lifeng, in Switzerland on Saturday for talks that could be the first step toward resolving the trade war between the two countries
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