UK Prime Minister Sir Keir Starmer and US President Donald Trump announced a trade deal between the two states on Thursday 8 May. According to the Labour Government this was a ‘Landmark’ deal. According to The Whitehouse, it was ‘Historic’.
The UK Government negotiated the trade deal with no consultation with the devolved governments. It didn’t need to because the powers to make trade deals is reserved. Any trade deal does, however, have significant implications for the economies of the devolved nations.
The UK Labour Government states that the trade deal will:
- protect British Jobs
- protect British Businesses
- save UK steel
- save British car makers
- give British farmers access to US markets with protections on food standards maintained but with a quota for 13,000 metric tonnes (reciprocal).
The US Administration states that the trade deal will:
- expand US farmers’ access to UK markets in beef and other agricultural products to the tune of $250 million
- secures the supply chain of U.S. aerospace manufacturers through preferential access to high-quality UK aerospace components
- creates a secure supply chain for pharmaceutical products
- includes more than $700 million in ethanol exports
- increases U.S. firms’ competitiveness in the UK’s procurement market.
There is still a 10% tariff. For the car manufacturers, Jaguar and Rolls Royce, car export tariffs will reduce from 27.5% to 10%. But with a quota of 100,000 exported to the US.
UK Steel will drop from the 25% tariff down to zero.
Scottish Salmon
The US is the second-largest export market for Scottish farmed salmon, with sales in 2024 of £225 million – accounting for more than a quarter of all salmon exported from the UK, both in value and volume. Salmon Scotland is not happy with the deal where the 10% tariff will continue to apply.
The trade body representing the farmed salmon industry is Salmon Scotland.
Tavish Scott, chief executive of Salmon Scotland, said:
“Scottish salmon is enjoyed in 50 countries worldwide, and we welcome strong trading relationships with overseas markets.
“However, the 10 per cent tariff on exports to the US remains a barrier, and we want to see it removed.”
And he continued:
“Today’s US-UK deal should be seen as a staging post – not the destination – on the path to reducing trade barriers, securing jobs in Scotland, and driving economic growth.”
Farming
The National Farmer’s Union Scotland recognised that there were opportunities and risks in the Trade Deal for Scottish agriculture.
The Union will be seeking further detail and clarification from Ministers on the following areas:
- How sensitive sectors will be protected and supported in the long term
- Whether UK food, animal welfare and environmental standards are fully upheld
- How government intends to ensure that Scottish producers are not undercut by imports produced to different standards
- What impact ethanol liberalisation may have on domestic grain and feed market
NFUS President Andrew Connon said:
“This deal raises a number of important questions for Scotland’s farmers. We will be looking closely at the detail and engaging directly with UK Ministers to understand what this means in practice. Our members will rightly expect that domestic production standards are not compromised and that a level playing field is maintained.”
Reaction in the USA
The UK is the first country to make a trade deal with the Trump administration. Sir Keir Starmer was put on speakerphone by the President as he thanked Trump profusely for making the agreement. CNBC reported that :
the deal does seem more advantageous to the U.S., at least based on the fact that a 10% tariff will remain on all U.K. imports, alongside other compromises allowed by Britain.
The U.S. already runs a trade surplus with the U.K., meaning that it exports more to the country than it imports. And a 10% tariff was what Trump slapped on the U.K. on April 2, so there was no reduction in those levies despite both countries reaching an agreement.
Based on the available details, Washington seems to have got the better end of the deal.
Seth Myers took A Closer Look:
On 6 May the UK reached a Free Trade Agreement with India described as a ‘deal for growth.’ Alongside the FTA, the UK and India have agreed to negotiate a reciprocal DCC. Employees moving between the UK and India, and their employers, will only be liable to pay social security contributions in one country at a time.
Fiona Grahame
