UK Navigates Complex US Tariff Landscape with Strategic Trade Deals and Ongoing Bilateral Negotiations in 2025
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UK Navigates Complex US Tariff Landscape with Strategic Trade Deals and Ongoing Bilateral Negotiations in 2025
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The biggest story this September is the ongoing impact of President Trump’s second administration tariffs, which continue to alter the trade landscape for UK exporters and importers. According to the Trade Compliance Resource Hub, the current US tariff rate on steel imports from the United Kingdom remains set at 25 percent. This rate was reaffirmed and maintained even after the US increased steel tariffs to 50 percent for most other countries back in June. The UK has managed to maintain its 25 percent rate thanks to ongoing bilateral negotiations following the Economic Prosperity Deal announced in May and the UK's unique status as a close ally. Importantly for UK manufacturers, steel products that fall under the WTO Agreement on Trade in Civil Aircraft continue to be exempt from these tariffs, meaning the UK aerospace industry faces less direct impact than other sectors.
In terms of regulatory changes, Holland & Knight reports the US Department of State's Directorate of Defense Trade Controls is finalizing new licensing exemptions and expedited review processes for the United Kingdom under the International Traffic in Arms Regulations. These updates represent a significant step toward reducing administrative friction in bilateral defense trade, going hand-in-hand with the AUKUS security partnership. The rules, which first went into effect on a provisional basis last September, aim to streamline military and advanced technology exports between the US, UK, and Australia.
Zooming out from US-UK trade, listeners should note the historic UK-India trade agreement finalized earlier this year. As highlighted in the National Conference on Public Employee Retirement Systems’ most recent coverage, this deal will gradually eliminate tariffs on 99 percent of Indian goods entering the UK and cut tariffs on 90 percent of UK exports to India, including a dramatic reduction in tariffs on British automobiles and whisky over the next decade. The UK’s ongoing pursuit of global trade deals is partly driven by the shifting US tariff environment, making diversification essential for many British exporters.
Meanwhile, Yale University’s Budget Lab calculates that the aggregate effect of the 2025 tariffs imposed by the US, including those affecting the UK, is a 1.7% rise in consumer prices and an average per-household income loss of $2,300 in the US. That knock-on effect is something UK exporters are watching closely as it influences US demand for British goods.
With trade policy still a daily headline in the UK and US, and bilateral tariff issues far from settled, it’s crucial for businesses, policymakers, and investors to pay close attention. That’s your United Kingdom Tariff News and Tracker update for today. Thank you for tuning in. Be sure to subscribe for regular insights. This has been a quiet please production, for more check out quiet please dot ai.
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