In a move that could significantly reshape transatlantic commerce, President Donald Trump signed Executive Order 14309 on June 16, 2025, enacting key provisions of the UK-US Economic Prosperity Deal. This agreement, unveiled at the G7 summit in Canada, aims to ease trade tensions and foster deeper economic cooperation between the United Kingdom and the United States. The order was published that same day in the Federal Register and its provisions went into effect on June 23, 2025.
Key components include:
- Automotive Industry Relief: Tariffs on UK passenger vehicles and light trucks imports into the United States are reduced from the 25% rate established by Proclamation 10908 of March 26, 2025 to 10%, with a quota allowing up to 100,000 UK-manufactured vehicles to enter the US annually under this reduced rate. UK automotive parts used in these vehicles also benefit from lower tariffs. Imports exceeding the quota will remain subject to the 25% rate.
- Aerospace Relief: Tariffs on UK aerospace products covered by the WTO Agreement on Trade in Civil Aircraft are fully excluded from Section 232 and reciprocal tariffs, promoting tariff-free trade in this strategically important sector. The United States has also stated that it intends to follow a structured and negotiated approach to national security concerns reflected in Section 232 investigations announced to date as such concerns relate to imports from the UK, and that the US is committed “to strengthen aerospace and aircraft manufacturing supply chains by establishing tariff-free bilateral trade in certain aerospace products.”
- Agricultural and bioethanol products: In exchange for the lowering and removal respectively of automotive and aerospace tariffs, the UK has agreed to eliminate tariffs on beef and bioethanol imported from the US. These cuts will be subject to tariff rate quotas; imports of up to 1.4 billion liters of bioethanol and 13,000 metric ton of beef can enter the UK free of duties, while the prevailing rates will apply to imports in excess of those thresholds.
However, some areas remain unresolved. The Executive Order instructs the Secretary of Commerce to introduce tariff-rate quotas for UK steel and aluminum, contingent on UK compliance with US supply chain security standards. Until such compliance is verified, existing tariffs remain in place, and the UK steel industry faces uncertainty, especially with a looming July 9 deadline that could double tariffs to 50%. The UK-US Economic Prosperity Deal also addresses pharmaceuticals, proposing preferential treatment for UK pharmaceuticals imports pending a national security review under Section 232. However, the executive order includes no concrete provisions regarding the importation of pharmaceuticals. For most other UK imports, a baseline 10% duty remains in effect pending a final comprehensive trade deal.
Prime Minister Sir Keir Starmer called the deal a “very important day” for UK-US relations, emphasizing its symbolic and strategic value. Critics, however, argue it’s a “tiny tariff deal” rather than a comprehensive trade agreement and have called for greater transparency, including impact assessments on British farmers, food standards, and the steel industry.
As implementation of the UK-US Economic Prosperity Deal unfolds, attention will focus on unresolved issues in steel, agriculture, and pharmaceuticals. UK car manufacturers, which have paused US shipments due to high tariffs, now see a clearer path forward. The aerospace and pharmaceutical sectors stand to benefit from reduced trade barriers. Nonetheless, uncertainties remain for businesses in these and many other industries. Whether this deal becomes a stepping stone or a stumbling block will depend on how both governments navigate the complex interplay of trade, security, and diplomacy.
