Context and Objectives
In a bold move towards economic collaboration, President Donald J. Trump and Prime Minister Sir Keir Starmer have aligned their visions to foster shared prosperity for citizens in both the United States and the United Kingdom. Their governments stand at a pivotal juncture, ready to deepen economic ties through the pioneering U.S.-UK Economic Prosperity Deal (EPD).
This groundbreaking initiative is set to tackle three fundamental goals, emphasizing the principles of fairness and reciprocity:
- To enhance the quality and quantity of mutually advantageous trade, thereby generating high-quality jobs and stimulating economic growth in both nations;
- To dismantle barriers that hinder American and British businesses from operating, investing, and trading seamlessly with one another;
- To fortify the Special Relationship by establishing a durable economic partnership grounded in fairness, reciprocity, and a collective vision for the economic challenges ahead.
This document outlines the preliminary terms of the EPD, encapsulating the mutual aspirations of the United States and the United Kingdom to cultivate a fairer, more efficient, and robust trading relationship. Parallel to this framework, discussions are also underway to create a transformative technology partnership between the two countries.
Negotiations for the EPD will commence immediately, focusing on the formalization of the proposals laid out in this document. Following the initial agreement’s implementation, both countries anticipate expanding the EPD over time to encompass additional sectors, continually seeking to enhance market access.
It is important to note that this document does not constitute a legally binding agreement.
- Addressing Tariffs
(a) After a reasonable negotiation period: (i) the United Kingdom aims to preferentially lower its applied tariff rates on select U.S. goods that are significant to American interests; and (ii) the United States similarly intends to reduce tariffs on select UK goods that matter to the UK economy. Both nations will strive to synchronize their tariff reductions as quickly as possible, taking into account domestic processes. At the UK’s request, the U.S. will consider preferential tariff reductions for territories under UK international relations.
(b) Currently, U.S. beef exports to the UK are subject to a 20 percent tariff within a quota of 1,000 metric tons (mt). The UK plans to eliminate this tariff and establish a duty-free quota of 13,000 mt for U.S. beef. In exchange, the U.S. will allocate 13,000 mt of its existing “Other Countries” tariff rate quota (TRQ) for beef to the UK. Additionally, the UK will introduce a duty-free TRQ of 1.4 billion liters for U.S. ethanol.
(c) The U.S. also intends to offer modified reciprocal tariff treatment for key UK imports, based on mutual trading balance and shared national security concerns. Such modifications will adhere to these security priorities, including those identified in future U.S. Section 232 investigations.
(i) This includes creating a quota of 100,000 vehicles for UK automotive imports at a 10 percent tariff rate, along with arrangements for necessary auto parts.
(ii) The UK will promptly address U.S. requirements concerning the security of supply chains for steel and aluminum products intended for export to the U.S. If these requirements are met, the U.S. will establish a quota for UK steel and aluminum at most favored nation (MFN) rates.
(iii) Subject to findings from the U.S. Section 232 investigation concerning pharmaceuticals and pharmaceutical ingredients, and contingent on the UK’s compliance with supply chain security, both nations will negotiate favorable treatment for these sectors. The UK commits to enhancing the operational environment for pharmaceutical companies.
(iv) Beyond the products mentioned, both countries will pursue a structured approach to address other sectors potentially impacted by Section 232 investigations, contingent on the UK ensuring supply chain security and the findings of relevant U.S. investigations.
(d) To ensure that businesses in both countries can capitalize on these changes, rules of origin will be applied to maximize bilateral trade while preventing circumvention of tariffs by non-parties. The U.S. acknowledges the UK’s request for continued efforts to lower tariffs on UK goods imposed by U.S. executive authority and those requiring Congressional approval.
- Addressing Non-Tariff Barriers
(a) The UK and the U.S. intend to collaborate to improve agricultural market access. Both countries support advancing discussions to bolster bilateral agricultural trade, affirming that imported food and agricultural products must meet the sanitary and phytosanitary (SPS) standards set by the importing nation. They commit to enhancing agricultural cooperation, addressing concerns, and formalizing engagement through international standard-setting bodies.
(b) Each country pledges to provide conformity assessment bodies from the other with treatment no less favorable than that afforded to its own bodies, covering accreditation and licensing procedures.
(c) Both nations will build upon existing Mutual Recognition Agreements (MRAs) by negotiating additional agreements across selected industrial goods and will move towards an agreement on domestic regulation for services.
(d) The UK and the U.S. will also engage in discussions regarding the principles and criteria for recognizing standards as international standards, agreeing on applicable standards for mutually recognized sectors.
- Increasing Digital Trade
(a) Both nations commit to negotiating an ambitious framework for digital trade provisions, which will encompass services, including financial services.
(b) They will also explore provisions relating to paperless trade, pre-arrival processing, and the digitalized movement of goods between the two countries.
- Strengthening Alignment and Collaboration on Economic Security
(a) The UK and the U.S. aim to bolster cooperation on economic security matters, including coordinated responses to non-market policies from third countries.
(b) They will work together on investment security measures, export controls, and ICT vendor security, building on existing alignment in trade and investment security.
(c) To ensure competitive, reciprocal, and secure access to procurement markets, both nations reaffirm their commitments under the Agreement on Government Procurement (GPA) and their free trade agreements, discussing implementation through the UK’s new National Security Unit for Procurement and the new powers established under the Procurement Act 2023.
(d) Both countries will negotiate provisions on customs cooperation to combat duty evasion and illegal transshipment of goods from countries subject to antidumping and countervailing duties that threaten economic security.
- Commercial Considerations and Opportunities
Both nations are dedicated to identifying mutually beneficial goods, services, and investment opportunities that enhance economic integration in critical industries and defense preparedness, leveraging government policies and private-sector engagement to facilitate these transactions.
- Other Matters
(a) Both the UK and the U.S. confirm their intent to discuss commitments related to intellectual property rights, labor practices (including combatting forced labor), and environmental policies.
(b) The UK will consider the interests of territories for which it is responsible in international relations.
(c) Both countries recognize that this arrangement is designed to strengthen their trade relationship based on mutual trust and a shared dedication to fair and reciprocal trade. Upon request from either nation, they will consult to explore potential adjustments to ensure the arrangement remains beneficial for both sides.
(d) Either country may terminate this arrangement with written notice to the other. Procedures for review and potential termination will be discussed as part of EPD negotiations.
This document is set to take effect on May 8, 2025.
