On May 8, 2025, President Donald Trump and U.K. Prime Minister Keir Starmer jointly unveiled a bilateral trade deal designed to deepen transatlantic commerce and reduce longstanding tariff barriers.
- Tariff Reductions on Automobiles
Under the agreement, U.K. passenger vehicle exports to the U.S. will see their 2.5 percent import tariff phased out over three years, while used U.S. vehicles entering the U.K. will shed a 10 percent levy over the same period . - Expanded Market Access for Agricultural Products
U.S. beef and ethanol producers gain enhanced U.K. market access, with beef tariffs eliminated immediately and ethanol duties cut from 20 percent to 5 percent by 2027 . - Digital Services and Financial Services Provisions
The pact also includes provisions safeguarding digital trade—preventing data localization mandates—and eases licensing requirements for U.S. financial firms operating in London, aiming to secure the U.K. as a bridge for U.S. financial services into Europe . - Automotive Rules of Origin
To incentivize North American and U.K. content in vehicle manufacture, the deal raises the regional value content requirement to 60 percent, up from 50 percent, for tariff‑free treatment . - Political and Economic Context
This agreement follows more than two years of intermittent talks, accelerated after Brexit finalized in January 2021. Both governments framed it as a model for 21st‑century trade, focusing on sustainability and digital innovation alongside traditional goods .
