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The U.S. and the U.K. agreed to the outlines of a trade deal last week, signaling that a 10% tariff is the new baseline all countries will bear. According to the BBC, the recent U.S.-U.K. tariff agreement introduces several changes to trade between the two countries:
- Car Tariffs Adjusted: The US has reduced tariffs on UK car imports to 10% for up to 100,000 vehicles annually, aligning with the UK's export figures from the previous year. Exports exceeding this quota will face a 27.5% tariff.
- Steel and Aluminium Tariffs Removed: The US has eliminated the 25% tariffs on UK steel and aluminium imports. However, a quota system will be implemented, and details regarding its scope and conditions are yet to be clarified.
- Agricultural Products: The UK has increased its quota for US beef imports from 1,000 to 13,000 metric tonnes and removed the associated 20% tariff. Notably, the UK maintains its ban on hormone-treated beef, ensuring no change to existing food standards.
- Digital Services Tax Unchanged: The UK's 2% digital services tax remains in effect, affecting major US tech companies. The US government has expressed dissatisfaction, labeling the tax as discriminatory and urging its removal.
Whether a good deal or not for either country, stocks still rallied because the market sees it as potentially the first of many "deal-making dominoes" to fall. On the heels of this announcement was the news that the US and China would meet in Switzerland over the weekend. Based on Monday's market reaction to those talks, I have a good idea what next week's article will be.
What is in the UK-US tariff deal?
by Jennifer Meierhans
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