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The United Kingdom and the US are close to agree on a trading pact that will support the impact of Donald Trump’s “Erationing Day” fees by giving low -tariff quotas for British car exports and steel, according to officials in London and Washington.
Agreement – decided to sign this week – will include quotas saving some exports to the UK from the full burden of additional 25 percent tariffs that Trump set on steel and car imports in February and March.
UK trade negotiators returned to Washington this week for the latest stages of negotiations, which a senior British official said he was continuing “rapidly” while warning that the disputes remained over pharmaceuticals.
As well as offering quotas for UK exports, Britain also hopes to provide discounts in the specific 25 percent of the tariff sector that Trump has set in cars and steel.
UK “offers” include Washington omissions on Britain’s digital services tax, set for international technology companies, tariff cuts set on US car exports, and a decrease in tariffs for US agricultural products.
However, the United Kingdom Government has said it will not accept food production standards in the US, such as chlorine chicken and beef treated by hormones, which would make it impossible to complete a so-called veterinary agreement with the EU, a major board of Britain’s “restoration” with the block.
The expected agreement in the United Kingdom is one of the 17 agreements that the Trump administration has sought to sign with its great trading partners while lining up in the comprehensive tariffs imposed on countries around the world on April 2.
US Treasury Secretary Scott Bessent told a Congress session on Tuesday that some of those agreements could be announced “probably this week”, adding that some countries had made “good offers” without giving details.
Trump administration officials are in talks with many countries, including Canada, Mexico, Japan, Vietnam and India, as well as the EU.
Some foreign officials have expressed private disappointment that the administration has been unclear for how much tariff relief will provide trade partners.
If it was successful, the US-UK deal would pursue a full free trade agreement between Britain and India, which was announced on Tuesday.
UK Prime Minister Sir Keir Starmer is under rising pressure to offer a deal with the US after the British industry and steel industries warned of potentially “devastating” effects on their sectors from Trump’s fees.
Mike Hawes, the chief executive of the Association of Engine and Traders, a trade body, has warned that new US tariffs had a heavy, significant and immediate “impact” at the end of the sector.
Luxury marks like Bentley, Jaguar Land Rover and Aston Martin depend heavily on exports to the SH.BA
SH.BA is the second largest UK export market for after the EU car manufacturers, with more than 100,000 vehicles sent last year, worth more than 7.5bn £, according to SMMT.
An executive of the high car industry welcomed the news of possible low tariff quotas for UK vehicle exports, but warned that the main goal should be to reduce the level of 25 percent tariffs.
“The quotas are complex to operate and naturally restrict to trade,” the executive added. “The most important thing is lowering the 25 percent tariff because over 10 percent is simply not stable.”
The United Kingdom was previously allowed to export up to 500,000 tons of steel per year to US tariff tariffs under a deal hit with then President Joe Biden.
This agreement was destroyed by Trump this year as it moved to regain 25 percent tariffs in all imports of steel and aluminum in the US
UK Steel, a business association, has warned that Trump’s tariffs will affect exports for an industry that is already under pressure from a global metal glut.
The US consisted of about 165,000 tonnes of British steel exports in 2023 – worth about £ 400m, and about 8 percent of total value. UK exports to the USA have been halved almost since 2017 when Trump set tariffs during his first term.
Two people with knowledge of negotiations said the agreement was being held by disputes over the pharmaceutical sector.
Last month, the Trump administration launched national security probes in pharmaceuticals and microcytes that could pave the way for drug tariffs – a UK export to the SH.BA 6.6bn £ 2024.
Britain is seeking to avoid the worst of any influence of future tariffs, according to the UK officials, who described the quotas offered by the US as “generous”.
A second UK official was more careful, describing the expected agreement as “limited”.
