US tariffs – US/UK trade deal announced

Background

With continued developments in US trade policy, please see this week’s key updates in our latest round-up on tariffs, global tax and beyond.

The week in summary

US-UK trade deal announced, steel import issues remain unsettled

On Monday, 16 June, US president Donald Trump signed an executive order implementing the General Terms of the United States of America-United Kingdom Economic Prosperity Deal. This executive order follows on from the US – UK Economic Prosperity Deal which was announced on 8 May. 

While this is not a fully formed trade deal, the executive order provides for preferential tariff treatment to UK goods in a number of industries; 

Automobiles and automobile parts 

Tariffs on automobiles and automobile parts will fall from the current 27.5% (25% section 232 tariffs & 2.5% MFN rate) in place since April, to a rate of 10% (7.5% section 232 & 2.5% MFN) with a quota of 100,000 cars per year which represents the total number of cars which were imported into the US from the UK in the previous year. 

Aerospace 

Section 3 of the executive order deals with Aerospace. It provides that any UK-originating products, that fall under the WTO Agreement on Trade in Civil Aircraft (‘WTO Aviation Agreement’), shall no longer be subject to any tariffs. The WTO Aviation Agreement includes all civil aircraft (excluding military aircraft), civil aircraft engines including parts of such engines, and components and sub-assemblies.   

Steel and aluminium 

While no direct agreement has been reached on steel and aluminium, the executive order does outline that a tariff-rate quota shall be “designed and established” in consolation with the United States Trade Representative in the future. As such, imports of these products into the US from the UK remain at 25%. 

Other

In line with the US “reciprocal” tariff plan, all other imports from the UK remain subject to the 10% baseline tariff. Interestingly, within the executive order, pharmaceuticals are specifically mentioned for consideration for preferential treatment pending the outcome of the current Section 232 investigations. 

Furthermore, in the General Terms, the United States and the United Kingdom committed to negotiate significantly preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients that are products of the United Kingdom, contingent on the findings of an investigation regarding pharmaceuticals and pharmaceutical ingredients under Section 232.

The agreement activates elements of a broader pact reached last month and follows several weeks of negotiations aimed at easing the impact of US tariffs on British businesses. The UK government hopes the deal will offer some protection to key industries. 

Speaking at the G7 Summit in Canada, Prime Minister Sir Keir Starmer described the agreement as a “very important day” for both nations. This marks the first trade pact announced by the White House since it introduced sweeping tariffs on a wide range of imports earlier this year.

Uncertainty remains over US steel tariffs on UK imports

The recent order from the US administration indicated plans to establish a similar framework for steel and aluminium trade, though specific details have yet to be disclosed. When asked whether tariffs on UK steel would be lifted, President Donald Trump responded, “We’re gonna let you have that information in a little while.” He added that the UK was “very well protected,” citing his personal affinity for the country: “You know why? Because I like them.” 

The UK government stated it would “continue to go further and make progress towards 0% tariffs on core steel products as agreed.” Currently, UK steel and aluminium exports to the US face a 25% tariff. Earlier this month, the UK was temporarily exempted from a planned increase to 50%, but that exemption is set to expire on July 9 unless a new agreement is reached.

Irish and global impact

Irish exports to the United States dropped by 62% in April after President Donald Trump imposed sweeping tariffs on all European Union imports. According to the latest data from the Central Statistics Office (CSO), export volumes to the US declined by €16 billion in a single month following the announcement of the so-called “liberation day” tariffs.

The value of global Irish goods exports fell by 43% in April, dropping to €21.9 billion from a record €38.1 billion in March, according to the latest figures. Despite the sharp month-on-month decline, exports were still €2.5 billion higher than in April 2024, indicating continued year-on-year growth.

From January to April 2025, medical and pharmaceutical products accounted for 60.2% of total Irish exports, amounting to €66.9 billion. This marks a 117% increase compared to the same period in 2024. Meanwhile, US President Donald Trump has threatened to impose 50% tariffs on most EU goods imports. However, the measure has been temporarily delayed until July 9th to allow time for negotiations.

Globally, exports of medical and pharmaceutical products also saw a significant decline, falling by 54% or €12.8 billion compared to the previous month. The introduction of US tariffs has disrupted global trade flows. Notably, the value of Irish goods exports rose by 44% in the first quarter of the year, as multinational companies based in Ireland rushed to stockpile products in the US ahead of the tariff implementation.

We’re here to help you

Keeping up to date with US trade policies, trade agreements and new and existing tariff reviews which may lead to further tariff measures is crucial to assessing the risk to your supply chain and the impact these tariffs may have. Understanding your product portfolio and the impact that tariffs may have on your imports is an important first step. We are here to support your business with this analysis and navigating these choppy waters.