Update: UK - U.S. Deal

It is now over 6 weeks since the UK and U.S. announced the Economic Partnership Deal (EPD), and exactly one week since the Prime Minister and President stood at the G7 in Canada and announced the implementation of some areas that had been agreed in the EPD.  

Following the release of an official update on Friday (20th June), we now have more information on the timescale for the implementation of these changes.  

The end of the month for cars & aerospace: 

The automotive industry was one which benefitted the most from the announcement on the 16th June.   During the short G7 statement, it was announced that the tariff rate quota of 100,000 (which saw tariffs reduced from 27.5% to 10% on UK origin cars) and supplementary 10% tariff on UK origin parts destined for UK origin cars, was to be introduced.  

In their latest update, the Department for Business & Trade have declared that they

“Expect that these arrangements will come into force by the end of the month”.  

Similarly, the reduction of tariffs on UK origin aerospace goods back to the MFN rate, is also likely to take effect by the end of the month.  

Beef & Ethanol Update: 

Within the EPD, both parties agreed to set aside 13,000 metric tonnes tariff quota for the import of beef.  U.S. importers will also be able to benefit from the removal of the 20% tariff on U.S. beef imports into the UK within the tariff quota they currently share with Canada.  

The latest update confirms that the UK “will lay legislation in Parliament to begin the quota into effect”. While in the U.S., it requires a re-allocation of their existing “Other Countries” tariff rate quota.  It is expected that this re-allocation will take place by 1st January 2026 at the latest.  

With regards to ethanol, it was a similar message as the update simply states

 “the UK will lay legislation in Parliament to bring the quota into effect”.  

Continued wait for Steel and Aluminium products: 

Unfortunately, there is little clarity as to how discussion are ongoing with regards to the steel and aluminium tariff reductions which were originally announced in the EPD.  The current message is that

“The UK and U.S. are conducting rapid discussions to create a quota at most favoured nation (MFN) rates for the export of steel, aluminium and certain derivative products from the UK to the U.S. and intend to finalise implementation as soon as possible”.  

Other conversations remain ongoing: 

A big concern for other UK sectors will be the ongoing S.232 investigations that the President has ordered, and the likelihood of future tariffs being introduced on their products.  Perhaps the largest concern for the UK is the ongoing investigation into pharmaceutical products.  

Within the EPD, it was stated that the UK and U.S. would negotiate on any such tariffs as an when they were introduced and that seems to still be the case with the update stating that “both countries remain focused” on securing preferential outcomes as and when needed.