Source · Select Committees · Business and Trade Committee
Recommendation 3
3
Accepted
UK exporters face worse US trade terms; GT-EPD economic impact remains uncertain.
Conclusion
We welcome the Government’s work to date in securing swift tariff relief for key sectors under the GT-EPD and acknowledge the progress made in challenging circumstances. However, we must acknowledge that UK exporters are now trading with our most significant single trading partner on terms which are worse than before President Trump came to office. Because ministers have not published an economic impact analysis—or a framework for assessing potential impacts—we cannot yet estimate the economic loss or gains from the GT-EPD. While implementation of some aspects of the agreement has commenced, many of the UK’s critical industries remain in a state of uncertainty about the future tariffs regimes they may face. It is also now clear that the UK has secured less favourable terms for some sectors than our much larger neighbours in the EU. Finally, 52 the future timetable for implementing measures that might be agreed in the GT-EPD is unclear. Together, these risks are increasing uncertainty for business. Uncertainty risks hurting, not helping, the appetite of business and investors to invest. (Conclusion, Paragraph 48)
Government Response Summary
The government acknowledges the Economic Prosperity Deal (EPD) and highlights achievements such as the Technology Prosperity Deal and preferential tariff rates for steel, aluminium, lumber, and cars. It states it is continuing talks on a wider UK-US Economic Deal and working to expand the EPD and reduce tariffs further.
Government Response
Accepted
HM Government
Accepted
President Trump’s State Visit was a valuable opportunity to further strengthen our existing economic relationship with the US. During the visit, the UK and US announced the Technology Prosperity Deal that builds on the EPD. The first ever UK-US tech agreement is focused on developing the fastest growing technologies like AI, quantum, and nuclear. The deal will bring new healthcare breakthroughs, clean home-grown energy, and more investment into local communities and businesses in Britain and the US. During the State Visit, the US confirmed that the UK will not face an increase in steel and aluminium tariffs to 50% and will remain the only country in the world to benefit from a preferential 25% rate on steel, aluminium and derivative exports to the US, thanks to the EPD. This provides the certainty that UK industry has long been calling for. Also as a result of the EPD, the UK has received preferential treatment for lumber products, with the lowest tariff rate of any country in the world at 10%. Other countries face tariffs of up to 50%. This is in addition to the tariff rate of 10% secured for UK cars under the General Terms – the lowest tariff for any country in the world. We are continuing talks on a wider UK-US Economic Deal which will look at addressing specific tariff and non-tariff barriers, increasing digital and services trade, and unlocking new commercial opportunities that benefit both nations. The US and UK have agreed that the EPD can be further expanded over time to cover additional areas, ensuring that the agreement remains fair, reciprocal, and mutually beneficial. We continue to work closely with our US counterparts to reduce tariffs further and secure the best possible outcomes for UK manufacturers.