UK-US Trade Deal- a short analysis:

A short analysis of the recent Trade Deal:

On Thursday, Trump and Starmer signed the "Economic Prosperity Deal" aiming to reduce tariffs and expand market access between the two countries. The 25% steel and aluminium tariffs have been removed, offering a reprieve to our steel industry, which was, a few weeks ago, on the verge of collapse.

1) 25% steel and aluminum tariffs removed:

• Just weeks ago, the British steel sector was on the brink of collapse, burdened by high production costs and the detrimental effects of U.S. tariffs. The UK government had allocated £94mn to rescue British Steel after taking over its two blast furnaces from Chinese firm Jingye, which had requested £1.2bn to sustain its £2bn green steel transition, while losses were running at £700,000 per day and a total collapse was projected to cost £1bn.
• This decision by the US offers a crucial reprieve, allowing UK steel manufacturers to regain some competitiveness in the global market. 
• However, we should not see this move by America as selfless. This move is part of a broader strategy to counteract China's dominance in the steel sector, where Chinese steel has long undercut American prices, pushing US manufacturers to seek more competitive advantages.

2) Pharmaceutical industry will see shifts in NHS drug pricing policies:

• The NHS, uses its purchasing power to drive down the prices of pharmaceuticals, and is now facing pressure to reconsider its approach. With the growing influence of large pharmaceutical corporations and changing trade dynamics, NHS drug prices are likely to rise in the future. 
• This shift may be an effort to improve the environment for pharmaceutical companies, providing them with more favorable conditions for growth and innovation. 
• However, this could also place a greater burden on taxpayers and patients, as the NHS moves away from its long-standing strategy of using its monopoly status to secure lower prices for drugs.

3) reduction in US tariffs on British cars:

• America has agreed to lower tariffs to 10% for the first 100,000 vehicles exported from the UK. This concession offers a significant boost to the UK’s automotive sector, which has faced significant challenges in recent years due to tariff-related obstacles in the U.S. market. 
• While this change provides a breathing space for British car manufacturers, it also serves as a reminder of the importance of navigating complex trade relations to maintain market access.

4) British farmers have gained tariff-free export quotas for 13,000 metric tonnes of agricultural products. 

• Good for UK’s agricultural sector, which has historically struggled with restrictive trade policies. 
• However, concerns linger over the potential influx of US agricultural products, particularly beef and ethanol, which may enter the UK market at a lower cost. 
• British farmers are apprehensive that these imports, produced under different standards, may undermine local farming industries, further complicating an already delicate balance between international trade and domestic production.

Sounds good? There are still many concerns that need to be addressed:

The ongoing tariffs on British products, particularly the “base” tariff, are not expected to be lifted anytime soon, although negotiations are reportedly underway. These tariffs continue to weigh on the UK economy, especially in sectors like aerospace, which contributes £40 billion to the UK’s GDP. Business Secretary Jonathan Reynolds has hinted at a specific guarantee of zero tariffs for the aerospace sector, which could help the UK remain competitive in global markets and protect key industries like Rolls Royce.