Navigating Opportunities and Risks in the May 2025 UK–US Trade Agreement
On 8 May 2025, UK Prime Minister Keir Starmer and US President Donald Trump announced a significant trade agreement, the first under President Trump’s current administration. This targeted deal substantially reduces tariffs and improves market access across several major industries, including automotive, steel, aluminium, aerospace, and pharmaceuticals. Prime Minister Starmer described the deal as a "fantastic, historic day," while President Trump highlighted it as the beginning of "a golden age of new opportunity."
Mike LaCorte, CEO of Conflict International, noted, "This agreement marks a meaningful step in UK-US cooperation and provides businesses with a chance to reassess their cross-border risk management and compliance strategies. As the landscape shifts, it's important that organisations stay informed and agile in their response."
John Rowan, Senior Vice President at Conflict International, added, "With trade expanding and regulatory expectations evolving, it's essential that organisations adopt adaptive and robust risk management practices. Our presence in both the UK and the US enables us to support clients with informed, on-the-ground insight as they navigate these changes. In light of these developments, a proactive approach to due diligence and digital security is key to realising the full value of the new agreement."
Key provisions of the deal include significant tariff reductions, notably the removal of the 25% tariffs on UK steel and aluminium exports, restoring competitiveness and stability within the UK steel industry. Additionally, a quota allows up to 100,000 British-manufactured vehicles per year into the US at a reduced tariff rate of 10%, significantly benefiting manufacturers like Jaguar Land Rover and Aston Martin, both of which saw immediate positive market responses.
The aerospace sector also benefits notably, as UK aerospace components, including those manufactured by Rolls-Royce, gain tariff-free access to the US, mutually benefiting the supply chains of both countries.
In pharmaceuticals, the US government has committed to preferential treatment for UK exports, reducing previous uncertainties surrounding potential tariffs. The agricultural sector sees reciprocal access for beef, while maintaining strict adherence to UK food safety standards, specifically continuing the ban on hormone-treated imports from the US.
The agreement's broader implications for the compliance and investigative sectors are also significant. The expected increase in bilateral trade activity will heighten demand for compliance checks, detailed due diligence, and investigative support, especially regarding supply chain verification and regulatory compliance. Mutual recognition of regulatory standards under the deal simplifies compliance processes and facilitates cross-border investigations and audits.
Enhanced cooperation between UK and US customs authorities is also expected to improve trade fraud and tariff evasion prevention, with increased transparency requirements likely to be enforced, especially in sensitive industries such as metals and pharmaceuticals.
Cybersecurity and digital trade emerge as important future considerations, with anticipated negotiations on a dedicated digital trade agreement. Companies involved in cross-border digital activities should anticipate stricter cybersecurity and data protection standards and regulations.
Despite the progress, key challenges and ongoing negotiations remain, notably around digital services taxation and broader service market access. Both governments have committed to continuing discussions aimed at further reducing the baseline 10% tariff still applicable to many goods.
Industry perspectives vary; Paul Nowak, General Secretary of the TUC, praised the agreement for its positive impact on job security. In contrast, concerns from the American Automotive Policy Council highlight ongoing industry tensions and underline the need for careful implementation of the agreement’s provisions.
As businesses adapt to the complexities of the new trade landscape, expert support in compliance, risk management, and investigative due diligence becomes crucial. Conflict International, operating from strategically located headquarters in the UK and USA, is well-equipped to assist organisations in managing these transatlantic challenges effectively, ensuring robust compliance, secure supply chains, and enhanced cybersecurity standards.
To discuss how Conflict International can support your organisation in navigating these developments and securing your operations, please contact our team directly.