Ah, the much-heralded US-UK "breakthrough" economic agreement of May 2025
Ah, the much-heralded US-UK "breakthrough" economic agreement of May 2025. Let's peel back the layers of this so-called deal and see what's inside.
Upon closer inspection, this is a modest framework addressing specific sectors, with many critical issues left untouched. As Reuters noted, while the agreement offers immediate sectoral relief, it falls short of being comprehensive.
Tariffs Trimmed, But Not Toppled
- Automobiles: U.S. tariffs on British-made cars are reduced from 27.5% to 10%, but only for up to 100,000 vehicles annually. But no changes to the 10 % base line tariff.
- Steel and Aluminium: The 25% tariffs on British steel and aluminium exports to the U.S. have been eliminated, offering some relief to UK metal producers .
- Ethanol: The UK will eliminate its 19% tariff on U.S. ethanol, potentially boosting American exports by up to $700 million .
Beefing Up Trade, But Not Standards
In agriculture, both nations have agreed to reciprocal market access for beef, allowing 13,000 metric tonnes of tariff-free beef exports. However, concerns linger over food safety standards, especially with U.S. officials downplaying worries about chlorinated chicken and hormone-fed beef .
Unresolved Issues: The Sequel
Despite the fanfare, several issues remain unresolved:
- Digital Services Tax: The UK retains its tax on U.S. tech giants, a sticking point in previous negotiations .
- Pharmaceuticals and Media: Tariffs and regulations in these sectors are still under discussion, with no concrete resolutions in sight .
The Fine Print: A Commitment to Continue Talking
Perhaps the most telling aspect of this agreement is what's not included. There's a mutual promise to keep the dialogue going—a commitment to continue talks rather than a finalised, comprehensive trade deal. As Sky News pointed out, to call it a 'trade deal' would be misleading; it's more of an 'economic deal' to reduce certain tariffs .
Conclusion: Much Ado About Not Much
In summary, while the agreement marks progress in specific areas, it falls short of the comprehensive free trade deal that was anticipated. Significant tariffs remain, and several critical issues are yet to be resolved. It's a step forward, yes, but more of a cautious shuffle than a confident stride.