What is in the UK-US tariff deal?
- Published
President Donald Trump has signed an executive order to reduce tariffs on some British goods entering the US.
It is the first part of a deal which the UK hopes will extend to other products sold to the States.
Trump's blanket 10% tariff on imports from countries around the world still applies to most UK items.
Here's an at-a-glance guide to what is in the deal.
This isn't a trade deal
When the agreement was originally announced in May, Trump declared on social media it would be a "major trade deal" - it's not.
He does not have the authority to sign the type of free-trade agreement India and the UK finalised in May. That authority lies with US Congress.
The legislative branch of the US government need to approve a trade agreement, which would take longer than the 90-day pause in place on some of Trump's tariffs.
The US-UK agreement has reversed or cut some of those tariffs on specific goods.
Car tariffs cut
The executive order signed by Trump will cut the tariff paid by US-based firms on imports of British cars.
The president had imposed a 25% tax on UK cars and automotive parts, on top of an existing 2.5% levy.
This has been cut to 10% for a maximum of 100,000 UK cars, which matches the number of these vehicles that the UK exported last year.
However, any cars exported above the quota will be subject to a 27.5% tax.
Cars are the UK's biggest export to the US - worth about £9bn last year.
But car industry leaders have told the BBC the quota could effectively put a ceiling on the number they can export competitively.
The UK currently imposes a 10% levy on US car imports which will remain in place.
The order Trump signed also agreed to remove tariffs on certain kinds of aerospace products.
Steel and aluminium still not signed
Steel and aluminium tariffs were a major part of the original tariff deal but the detail is yet to be worked out.
In May, the government announced that Prime Minister Sir Keir Starmer had negotiated a 25% levy down to zero.
However, an agreement on this has not been finalised, meaning that UK steel and aluminium are still subject to a 25% tariff.
Furthermore, the rate could double to 50% if the UK and US do not reach a deal by 9 July.
Under current rules, in order to qualify for an exemption, steel has to be "melted and poured" in the country from which it is imported.
Last year, Tata Steel shut down its blast furnaces and, while it transitions to using an electric furnace, it has been importing steel from India and the Netherlands.
The White House previously said it would impose a quota on the "most favoured nation rates for UK steel and aluminium and certain derivative steel and aluminium products."
It is currently unclear how much of these products the UK will be able to export to the US under this quota system without paying more.
It is also unclear whether the scrapping of tariffs will apply to steel derivative products and whether only steel melted and poured in the UK will benefit.
The UK exports a relatively small amount of steel and aluminium to the US, about £700m in total.
However, the tariffs also cover products made with steel and aluminium, including things such as gym equipment, furniture and machinery.
These are worth much more, about £2.2bn, or about 5% of UK exports to the US last year.
Reacting to the news that Trump had agreed to cut some tariffs, industry body Steel UK said: "We look forward to imminently benefiting from a tariff rate cut similar to that which the automotive and aerospace industries will enjoy.
"The UK steel industry badly needs clarification over the 'melted and poured' requirement, and the level of quotas available to UK steelmakers."
Pharmaceuticals the big unknown
What will be agreed on pharmaceuticals is still unknown, with the UK saying work would continue on this and the remaining reciprocal tariffs.
In May, the US said both countries would "promptly negotiate significantly preferential treatment outcomes on pharmaceuticals".
Pharmaceuticals are a major export for the UK when it comes to US trade – last year sales of these products were worth £6.6bn making it the UK's second-biggest export to the US.
It's also America's fourth biggest export to the UK, valued at £4bn last year.
Most countries, including the US, imposed few or no tariffs on finished drugs, as part of an agreement aimed at keeping medicines affordable.
The president has not announced any trade restrictions on medicines yet.
No change on digital services tax
There was no change to the UK's 2% digital services tax in the original deal and this has been seen as a sticking point.
Businesses that run social media, search engines or online marketplaces have to pay it if they receive more than £500m in global revenues and £25m from UK users annually.
But this threshold is easily met by US tech giants like Meta, Google, Apple.
The UK reportedly netted nearly £360m from American tech firms via the tax in its first year.
The UK government said it had "agreed to work on a digital trade deal".
But the US government said it was "disappointed that the UK was unwilling to agree to fully address the tax.
"It is discriminatory, unjustified, and should be removed promptly," it said.
No drop to food standards
US beef exports to the UK had been subject to a 20% tariff within a quota of 1,000 metric tonnes. The UK has scrapped this tariff and raised the quota to 13,000 metric tonnes, according to a White House document.
In return, the UK has been given the same quota at a lower rate in line with other countries.
Crucially, there will be no weakening of UK food standards on imports as part of this deal, the UK government statement said, insisting that American hormone-treated meat will not seep onto the UK market.
This is an area where the UK has chosen alignment with EU - and the forthcoming "Brexit reset" with the EU - over the US.
Meanwhile, the UK has granted a tariff-free quota of 1.4 billion litres of US ethanol.
Previously, US ethanol shipments to the UK faced a 19% tariff. The UK produces around 1.4 billion litres of ethanol a year. Companies have warned that if Britain is flooded with cheaper US ethanol it places the future of domestic firms in peril.
The National Farmers Union said the inclusion of "a significant volume of bioethanol [a renewable fuel made from crops] in the deal raises concerns for British arable farmers".
