UK and U.S. economic prosperity deal takes effect – Key takeaways

Beef

As agreed in the General Terms, on 30 June 2025 the UK removed its 20% tariff on imports of U.S. beef within a 13,000 metric ton (mt) quota (previously imports were subject to a 20% tariff within a quota of 1000 mt).¹ In return, the U.S. has agreed to reallocate 13,000 mt of its existing “Other Countries” tariff rate quota for beef to the UK. Notably, the UK has not yet made any concessions on food safety and standards, reflecting a red line set out by the UK Government.²

Ethanol

As agreed in the General Terms, on 30 June 2025 the UK set a duty-free quota of 1.4bn litres for imports of U.S. ethanol.³ Previously, ethanol imported from the U.S. was subject to import duties of £8.50/100 litres.⁴

Automotives

As of 30 June 2025, the U.S. has lowered tariffs on automotive imports, including automobiles and certain parts, from the UK. This is a reduction from the additional 25% across-the-board tariff that the U.S. imposed on automotives and auto parts in April this year.

The U.S. has established a quota of 100,000 vehicles as classified in heading 8703 of the Harmonized Tariff Schedule of the United States (“HTSUS”) which shall now be subject to a 10% tariff.

In addition, imports from the UK of certain automotive parts (those specified in note 33(g) to subchapter III of chapter 99 of the HTSUS) that would otherwise be subject to a 25% tariff are now subject to a 10% tariff. This applies provided that such parts are for use in automobiles that are products of the UK.⁵

Steel and Aluminium

Within the General Terms the U.S. committed to establishing a tariff rate quota for imports of aluminium and steel, as well as derivative steel and aluminium products, from the UK. The EO issued on 16 June 2025 states that the US Secretary of Commerce “shall design and establish a tariff-rate quota for steel articles and derivative steel articles that are products of the United Kingdom, consistent with the General Terms and the purpose of this order.” As of 4 July 2025, the details of this tariff rate quota are yet to be determined, however, leaders of both countries have confirmed they are “progressing towards 0% tariffs on core steel products”.⁶

On 3 June 2025, President Trump issued an EO imposing an additional 25% duty on steel and aluminium imports into the U.S. (bringing the overall rate to 50%). The UK was exempted from this additional rate. However, the EO provides that from 9 July 2025 onward, the U.S. may increase the tariff rate on steel and aluminium imports from the UK to 50%, if the UK “has not complied with relevant aspects of the [Economic Prosperity Deal].” This has been interpreted primarily as a concession to limit Chinese involvement in the production of steel and aluminium in the UK, and has been criticised by China’s foreign ministry.⁷

Pharmaceuticals

The General Terms state that both countries “intend to promptly negotiate significantly preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients.” However, this is expressed to be contingent on the UK’s compliance with supply chain “security requirements,” as well as the findings of the U.S. Section 232 investigation into the effects on U.S. national security of imports of pharmaceuticals and pharmaceutical ingredients (a power under the Trade Expansion Act of 1962, which may result in increased tariffs on imports of such products). The EO issued on 16 June 2025 reiterates this but does not provide any further details.

Aerospace

From 30 June 2025, subject to the EO issued on 16 June 2025,  the U.S. has removed a 10% tariff on certain aerospace imports from the UK, such as aircraft engines and parts.

The UK and U.S. have agreed to cooperate in enhancing agricultural market access and supporting bilateral agricultural trade.  Notably, within the General Terms, the two parties affirmed that “imported food and agricultural goods must comply with the importing country’s sanitary and phytosanitary standards [(“SPS”)] and other mutually agreed standards.”  This in effect meant that the U.S. agreed to respect the more stringent SPS standards of the UK.

Furthermore, the UK and U.S. have each confirmed their intention to treat each other's conformity assessment bodies equally, with regards to procedures, standards (including the SPS), fees, and other requirements, as well as expanding the current Mutual Recognition Agreements (“MRAs”) by negotiating additional agreements.

The countries will also potentially discuss recognising specific sectoral standards as international standards.

Aside from the details set out in the text of the General Terms and subsequent actions, there have been additional announcements covering other sectors that could fall within the scope of future agreements, including:

1. Technology: The UK Government's press release announcing the initial deal with the U.S. states that it "opens the way to a future UK-U.S. technology partnership through which our science-rich nations will collaborate in key areas of advanced technology, for example...aerospace and space.” Although not explicitly stated in the press release, the UK government has said that it is likely to include growth areas such as AI, quantum computing and cybersecurity.⁸
2. Mutual Cooperation on Economic Security: The version of the agreement released by the U.S. also highlights that both parties have agreed to “strengthen cooperation on economic security, including by coordinating to address the non-market policies of third countries.” These include investment security measures, export controls, and ICT vendor restrictions – all of which the U.S. has imposed against China recently. Furthermore, the U.S. version of the agreement also called for the parties to cooperate on “secure access” to their respective government procurement markets and to combat the illegal transshipment of goods from third countries subject to “antidumping, countervailing duties, safeguards, etc.”⁹ All of these provisions appear to have Chinese activities in mind, and suggest that the U.S. is interested in key partners, such as the UK, distancing from China as a pre-requisite for closer bilateral economic relations.

In addition, the UK’s ambassador to Washington has confirmed that the UK is still seeking to negotiate down the 10% baseline tariff on U.S. imports from the UK.