Trump's UK-US trade deal: what is Britain getting and what is it giving away?
As much as Jonathan Reynolds' opponents will hate to admit, it has been a positive week for the Business and Trade Secretary. But it is only Thursday.
The ink on Britain's landmark post-Brexit trade deal with India had hardly dried before the news broke that an agreement with the US was imminent. Writing on Truth Social overnight, Donald Trump said it was a 'great honour' to have the UK be the first trade deal signed with the United States, claiming it will be 'full and comprehensive'.
The devil will, however, be in the detail. And notably, UK officials are already seeking to temper expectations.
Rather than serving as a full-blown trade pact, some observers suggest the announcement may only include a 'head of terms' outline, setting out the broad perimeters of the deal while negotiations continue.
Even so, the initial framework will be significant. Here are the sectors likely to be most affected.
The threat of 25pc tariffs to struggling British car manufacturers has been at the forefront of negotiators' minds.
It is understood that a trade deal with the US would lower this rate for an agreed quota of imports, cushioning some of the blow.
Despite not yet knowing what the new tariff rate will be, this will no doubt serve as a major win for Britain.
The Institute for Public Policy has warned that 25,000 jobs in the car industry were at risk from 25pc tariffs, hitting Britain's industrial heartlands the hardest.
The carve-out would be particularly valuable for companies such as Jaguar Land Rover, as the US market generates most revenue for the carmaker.
However, the concession will not come cheap, as the UK may in turn have to reduce tariffs on American car imports.
There is also an expectation that the UK will be spared the worst of steel tariffs, which rose to 25pc after Trump kicked off his trade war in February.
It is not clear whether British aluminium exports would also be included in a deal with the White House or if it would only cover steel.
The UK sells around 200,000 tonnes of steel a year to the US, worth over £400m.
Britain's aluminium sector has also warned of an existential threat from the tariffs, with 10pc of its exports sold to the US for a value of £225m.
Securing a concession from Trump would therefore be crucial for the industry.
One of the biggest concessions Britain will have to offer to protect its manufacturing industry is expected to be related to the Digital Services Tax, which affects tech giants such as Google and Meta.
In 2020, the Government introduced a 2pc levy on revenues from search engines, social media services and online marketplaces, which yields around £800m a year.
The US president has previously compared digital taxes of this type to 'overseas extortion'.
However, if Reynolds agrees to cave into US tech billionaires, it is likely to enrage backbench Labour MPs, who are already up in arms over welfare cuts.
On a more positive note, ministers believe there is scope to secure a better deal on services with the US, which account for a far greater proportion of US exports than goods.
The UK sold £137bn of services to the US last year, making up for than a quarter of all such exports.
Experts believe a full-fat trade agreement with the US, like the one Theresa May tried to secure during her premiership, is off the table because of red lines over food standards.
British ministers have explicitly ruled out accepting controversial products like chlorinated chicken and hormone-fed beef, much to Trump's dismay.
Accepting such food standards would make it impossible to achieve a veterinary agreement with the EU, which was a Labour manifesto pledge to prevent border checks and lower prices.
However, Britain is expected to offer to lower import duties on other American agricultural products. These could include nuts, soy beans and wine.
Trump is yet to announce how hard he plans to hit foreign pharmaceutical companies.
This is a particular concern for some of Britain's biggest companies, such as GSK and AstraZeneca.
The US president has said he will set out levies on the sector over the next two weeks, after launching an investigation into the national security implications of such imports at the start of April.
It is understood that pharmaceuticals have been a sticking point in UK negotiations with the US.
Any meaningful deal for the UK would have to include the industry. However, a failure to secure a more comprehensive agreement this week suggests the issue remains unresolved.
The UK sold £6.5bn worth of pharmaceuticals to the US last year, making it one of the top exports.
Trump warned on Sunday that he planned to hit foreign film imports with tariffs of 100pc, in another late curveball complicating negotiations.
While taxing services is notoriously difficult and details remain scarce, UK film insiders have warned such tariffs could 'wipe out the UK industry'.
Film and TV are seen as some of the UK's most successful service exports, but have struggled to recover under high interest rates and after Hollywood strikes.
The UK Government was in 'active discussions' with the White House about these tariffs, Chris Bryant, the culture minister, said on Wednesday.
The overall economic impact of a US trade deal hinges on how comprehensive it will be. The expectation is that UK exporters will still be subject to 10pc tariffs across the board.
Allan Monks, an economist at JP Morgan, said that the scope of the deal 'looks limited' and 'the economic impact for the UK is likely to be very small'.
Monks put the overall boost to GDP at a measly 0.1pc, but said it would help key industries.
He warned that Britain's attempt to get a reset in EU relations ahead of a summit on May 19 meant 'subsequent progress on key outstanding issues with the US could become harder'.
He said: 'If there is no further breakthrough on the US baseline tariff, that would significantly limit the economic upside from continued negotiations and further concessions.
'With the UK having broadly balanced goods trade with the US, a reasonably good political relationship, no real threat of retaliation from Westminster and extensive bilateral negotiations having taken place, it is not clear where the UK can go from here.'
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The Hill
11 minutes ago
- The Hill
Trump: "Our Deal with China is DONE;" Tariffs on Chinese Goods Will RISE To 55%
President Trump announced Wednesday a pending trade truce with China as the White House searches for momentum ahead of a looming deadline to strike dozens of other similar deals. The president's announcement was light on details but gave Trump and his team the chance to tout a victory during a crucial stretch for his trade agenda. Trump said the deal with China, struck following negotiations in London between his top economic officials and their Chinese counterparts, set tariff rates on U.S. and Chinese imports, allowed Chinese students to attend U.S. colleges and set terms for U.S. imports of Chinese rare earth minerals.


Fox News
12 minutes ago
- Fox News
Democrat accuses Trump of unleashing ‘campaign of terror' on illegals as LA riots rage
As anti-ICE riots rage across Los Angeles, congressional Democrats marked the 13th anniversary of DACA with a press conference during which Rep. Delia Ramirez, D-Ill., accused President Donald Trump of unleashing a "campaign of terror" on illegal immigrants. DACA, or Deferred Action for Childhood Arrivals, is a U.S. immigration policy that defers deportation for eligible immigrants who arrived in the country as children. Speaking just outside the Capitol building Wednesday, Ramirez accused Trump, border czar Tom Homan, Homeland Security Advisor Stephen Miller and the entire administration of targeting anyone they consider "undesirable." She also pushed a conspiracy theory that the president will target U.S. citizens the same way he has deported criminal migrants. "Trump, Homan, Miller and this whole regime has waged a campaign of terror against our neighbors, against our families, our loved ones, as they advance their fascist agenda and try to cast immigrants as a public enemy," Ramirez said. "Let us say it, and I'm going to say it unapologetically," she added. "We don't need bans, We don't need walls. We don't need raids. We don't need kidnappings. We don't need masked agents terrorizing our communities. We don't need military attacking our neighbors. We have to demand an end to the terror tactics." Los Angeles has been rocked by fiery riots and clashes with police and federal authorities since Friday. The rioting began Friday in response to immigration enforcement operations by ICE throughout the city. In response, Trump deployed federalized National Guard troops and several hundred Marines to assist in restoring order. This move has been heavily criticized by Democrats, who have accused Trump of intentionally provoking rioters. "The unlawful actions used against immigrants today will be used tomorrow on anyone who this regime deems undesirable because fascism always demands a public enemy," Ramirez claimed. "It is why we must stand with DACA recipients, and we must also stand with their parents. "We must also stand with their uncles and their sisters and their tias and our small businesses and our teachers and our LGBTQ and every single person this regime is attacking." Despite Ramirez's characterization of the Trump administration targeting innocent "tias," federal immigration authorities have detailed criminal charges against the illegals arrested by ICE. This week, ICE published information on charges against illegals arrested in Los Angeles during the ongoing riots. On Wednesday, ICE said it had arrested Jesus Romero-Retana, a Mexican national who the agency said had been convicted of battery and threatening with intent to terrorize. ICE also said it arrested a Cambodian illegal named Mab Khleb in Los Angeles Tuesday. The agency said he had been sentenced for lewd acts with a child, battery and multiple drug offenses. ICE said it arrested the criminal illegal "despite the best efforts of anti-ICE protestors in the city." A source familiar with the operations shared with Fox News Digital a listing of some of the arrests made by ICE in the last week. These arrests included a Salvadoran national arrested in Los Angeles for sodomy of a child, a Mexican national arrested in Chicago for criminal sexual assault of a child, a Mexican national arrested in Houston for indecent sexual contact with a child, a Honduran national arrested in El Paso for possession of child pornography and a Laotian national arrested for murder and attempted murder.
Yahoo
12 minutes ago
- Yahoo
Elon Musk Says He 'Regrets' Some Of His Posts About Donald Trump: 'They Went Too Far'
Elon Musk says he 'regrets' some of his posts last week during his feud with POTUS Donald Trump. Musk took to Twitter/X this morning to offer contrition, saying his posts 'went too far.' He did not specify which posts crossed a line, but he appears to have deleted his most nuclear pronouncement about Trump appearing in the Jeffrey Epstein files. The White House rubbished the unevidenced claim. More from Deadline Blake's Version: Scooter Braun's HYBE America Subpoenaed By Taylor Swift's Pal In Justin Baldoni Battle Newsom Compares Trump To "Failed Dictators" In Fiery Speech Over Troops In LA: "The Moment We Have Feared Has Arrived" Trump Wins Bid To Halt Newsom's "Dangerous" Desire For Restraining Order Against Troops In LA Over ICE Raids; Rubber Bullets Fired Downtown - Update Last week, Musk called Trump's tax bill a 'disgusting abomination,' leading to an explosive war of words between the Tesla boss and former ally Trump. Trump last week declared that their relationship was over, and that he had no interest in mending ties with Musk. Musk urged Americans to call their representatives in Washington to 'kill the bill.' In response, Trump said Musk had 'lost his mind' and threatened to cancel his government contracts, which have an estimated value of $38B (£28B). Musk appeared to have deleted many of his posts over the weekend, including one that called for Trump's impeachment. Musk was the largest donor for Trump's 2024 presidential campaign. The possibility of a potential thawing in relations appeared to be welcomed by investors. Tesla's share price rose by 2.6% in pre-market trading. Best of Deadline 'Stick' Soundtrack: All The Songs You'll Hear In The Apple TV+ Golf Series 2025 TV Series Renewals: Photo Gallery 2025-26 Awards Season Calendar: Dates For Tonys, Emmys, Oscars & More Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data