US agrees UK trade deal but 10% tariff remains
The terms of the US-UK trade agreement remain narrow, but the move reinforces president Donald Trump’s plan to institute a baseline 10% tariff for all countries.
On Thursday 8 May, Trump announced a new trade deal with the UK that would cap all potential tariffs at 10%.
The announcement comes a month after Trump unveiled a global tariff plan by which all counties would receive a baseline 10% tax, while regions like China, Japan and the EU would be hit with steeper rates. The following week, Trump announced a 90-day pause on these higher rates, bringing all tariffs to a uniform 10%.
The agreement primarily addresses the trade of beef, ethanol, and machinery, and for the UK, it will save jobs as the deal slashes rates on cars and metals. “Thousands of jobs have been saved as the prime minister secured a first-of-a-kind trade agreement with the US,” a statement released by the British government begins.
There is some speculation as to how impactful this trade agreement will actually be, with early reports saying that final details will be worked out in the coming weeks. During a press conference conducted in the Oval Office, Trump acknowledged that manufacturing of such brands as Rolls Royce and Jaguar can not be moved out of England.
Scotch left out of trade deal
The same is true of geographically protected spirits categories such as Scotch and while the president has identified this principle within automobile manufacturing, there is no mention of spirits as of yet.
A spokesperson for trade body the Scotch Whisky Association said: “The welcome progress for other sectors is a clear sign that the intensive efforts by the UK government is bearing fruit.
“We continue to support this measured and pragmatic approach in the weeks ahead so that Scotch whisky can return to the zero-for-zero tariff agreement with our friends and partners in the US whiskey industry as soon as possible.”
If anything, the trade deal seems to signal that the baseline 10% tariffs will be a best-case scenario for most countries, who will have to negotiate with Trump individually to avoid increased rates.
Earlier this week, the UK announced a trade agreement with India, which will eventually see tariffs on gin and Scotch whisky fall to 40%.
Related news
Takamaka brings Seychelles spirit to UK
UK-India trade deal ‘changes everything’ for spirits producers
