Fact Sheet: U.S.-UK Reach Historic Trade Deal
The White House, May 8, 2025
ESTABLISHING
A NEW PARADIGM FOR OUR SPECIAL RELATIONSHIP: Today, on the 80th
anniversary of Victory Day for World War II, President Donald J. Trump and
Prime Minister Keir Starmer announced a historic trade deal, providing American
companies unprecedented access to the UK markets while bolstering U.S. national
security. This is a great deal for America.
· President Trump: “The
deal includes billions of dollars of increased market access for American
exports, especially in agriculture, dramatically increasing access for American
beef, ethanol, and virtually all of the products produced by our great farmers.”
o “The UK will reduce or
eliminate numerous non-tariff barriers that unfairly discriminated against
American products.”
o “This is now turning
out to be, really, a great deal for both countries.”
· Prime Minister Starmer:
“This is going to boost trade between and across our countries. It’s going to
not only protect jobs, but create jobs, opening market access.”
· This trade deal will
significantly expand U.S. market access in the UK, creating a $5 billion
opportunity for new exports for U.S. farmers, ranchers, and producers.
o This includes more than
$700 million in ethanol exports and $250 million in other agricultural
products, like beef.
o It commits the
countries to work together to enhance industrial and agricultural market
access.
o It closes loopholes and
increases U.S. firms’ competitiveness in the UK’s procurement market.
o It ensures streamlined
customs procedures for U.S. exports.
o It establishes high
standard commitments in the areas of intellectual property, labor, and
environment.
o It maximizes the
competitiveness and secures the supply chain of U.S. aerospace manufacturers
through preferential access to high-quality UK aerospace components.
o It creates a secure
supply chain for pharmaceutical products.
· The reciprocal tariff
rate of 10%, as originally announced on Liberation Day, is in effect.
· The United States will
agree to an alternative arrangement for the Section 232 tariffs on UK autos.
o Under the deal, the
first 100,000 vehicles imported into the U.S. by UK car manufacturers each year
are subject to the reciprocal rate of 10% and any additional vehicles each year
are subject to 25% rates.
o the supply chain of
U.S. aerospace manufacturers through preferential access to high-quality UK
aerospace components.
o It creates a secure supply chain for pharmaceutical products.
· The United States also
recognizes the economic security measures taken by the UK to combat global
steel excess capacity and will negotiate an alternative arrangement to the
Section 232 tariffs on steel and aluminum.
o This deal creates a new
trading union for steel and aluminum.
· This U.S.-UK trade deal
will usher in a golden age of new opportunity for U.S. exporters and level the
playing fields for American producers.
· Today’s action also sets the tone for other trading partners to promote reciprocal trade with the United States.
A
FRAMEWORK TO BOLSTER ECONOMIC SECURITY: President Trump continues
to advance the interests of the American people, enhancing market access for
American exporters and lowering tariff and non-tariff barriers to protect our
economic and national security.
· On April 18, President
Trump had a call with Prime Minister Starmer to discuss our bilateral trade
relationship.
· U.S. total goods trade
with the UK was an estimated $148 billion in 2024.
· The UK average applied
agricultural tariff is 9.2% while the U.S. average applied agricultural tariff
(prior to April 2) was 5%.
· The UK maintains
certain tariff and non-tariff barriers that restrict market access and create
an unfair playing field for American workers and businesses.
o For example, the UK
imposes tariffs that can exceed 125% on meat, poultry, and dairy products on
top of maintaining non-science-based standards that adversely affect U.S.
exports.
· On April 2, 2025, Liberation Day, President Trump imposed a 10% tariff on all countries to address unfair trade practices that have contributed to America’s trade deficit and imbalances in order to better protect American workers and our national security.
A
MILESTONE IN ADVANCING AN AMERICA FIRST TRADE POLICY: Since Day
One, President Trump challenged the assumption that American workers and
businesses must tolerate unfair trade practices that have disadvantaged our
workers and businesses for decades and contributed to our historic trade
deficit.
· Reversing these
conditions and addressing the lack of reciprocity in America’s trade
relationships will bring about a new Golden Age and Make America Great Again.
· President Trump
continues to advance the interests of the American people, enhancing market
access for American exporters and lowering tariff and non-tariff barriers.
· The Economic Prosperity Deal with the United Kingdom is a critical step forward in a special relationship to promote reciprocal trade with a key ally and partner.
https://www.whitehouse.gov/fact-sheets/2025/05/fact-sheet-u-s-uk-reach-historic-trade-deal/
In
the UK, Value Added Tax (VAT) is a consumption tax charged on most goods and
services.
There
are three main rates of VAT that apply in the UK:
· Standard Rate
(20%): This applies to the majority of goods and services, including items
like electronics, adult clothing, furniture, consulting services, and
restaurant meals.
· Reduced Rate
(5%): This rate applies to certain goods and services considered essential
or beneficial, such as domestic fuel and power, children's car seats, and
energy-saving materials installed in homes.
· Zero Rate (0%): Zero-rated items are still subject to VAT, but the rate charged is 0%. This applies to basic necessities like most food items, children's clothing and footwear, books, newspapers, and public transport within the UK. While customers pay no VAT, businesses dealing in zero-rated goods can still reclaim VAT on their related business expenses.
In
addition to the specific rates, some goods and services are exempt from VAT
altogether, meaning they are not subject to VAT and do not incur a VAT charge.
Examples include insurance, education, and certain financial services.
https://www.google.com/search?q=what+is+the+vat+tax+in+the+uk
Comments
The UK is not an EU member country and is not subject to EU taxes. The UK's nominal GDP in 2025 is forecast to be $3.84 trillion. The UK is a NATO country and has agreed to increase their NATO support from 2% to 5%. NATO will purchase Military Equipment from the US and donate it to Ukraine.
The UK also has an income tax topping out a 48% in addition to its 20% VAT tax on luxury items. There is a 0% to 5% sales tax on food and other necessities families need.
The largest UK based companies by revenue include Shell Oil $283.8 billion and BP $189.2 billion. Next is HSBC (financial) $142.3 billion and Tesco (supermarkets) $89.1 billion. Jaguar revenue in the UK for 2024 was $29 billion. Rolls-Royce revenue in the UK for 2025 is projected to be $156 million.
The Corporate Tax Rate in the UK is 25%. The UK population is 69.55 million. The average household income in the UK is $35.570. In 2024, the US had a goods trade surplus with the UK of $11.9 billion.
In 2024, China's exports to the UK were $78.9 billion, while the UK's exports to China were $46.48 billion. This results in a trade surplus for China of $32.42 billion.
In 2024, the UK had a significant trade deficit with China, driven primarily by imports of manufactured goods. Key imports included machinery, computers, broadcasting equipment, and cars, while exports to China were led by machinery, pharmaceutical products, and mineral fuels. The UK's overall trade deficit in goods with the world was partly offset by a surplus in services, but the deficit with China remained substantial, according to The House of Commons Library.
In
2025, the UK nominal GDP is estimated at $3.68 trillion. Nominal per capita GDP
is $47,738. In 2025, the average household disposable income per capita in the
United Kingdom is forecast to be $35,510 USD.
UK Population is 69.5 million. US Surplus: In May 2025, the US maintained a positive trade balance with the UK, exporting $8.08 billion and importing $4.78 billion.
Norb Leahy, Dunwoody GA Tea Party Leader
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