Five years after Brexit, the UK is still grappling with its economic aftermath. The debate continues: has Brexit helped or hurt the nation? If gains exist, when will they materialize? Isolated from the EU, the UK now finds itself negotiating alone with a protectionist US under Trump—an urgent necessity given the Labour government’s constrained fiscal environment and the country’s ongoing low-growth challenges. To sustain exports and support its manufacturing base, the UK began trade talks with the Trump administration in 2020. The talks stalled during Biden’s presidency—due to friction over Northern Ireland and regulatory divergence—but resumed in 2024, culminating in the 2025 deal.
The UK’s primary goals were to fill the supply-demand gap left by the EU, demonstrate its global trade resilience, and safeguard vulnerable industries like steel, autos, and aerospace—all hit by Trump-era tariffs. The US entered the deal with its own agenda: reinforcing Trump’s bilateral trade policy vision, increasing American export penetration in the UK, and cushioning economic shocks from ongoing tensions with China. The agreement includes a reduction in auto tariffs from 27.5% to 10% for up to 100,000 UK vehicles annually—slightly limiting for Britain given it exported 102,000 cars to the US in 2024. Though helpful, the deal imposes a ceiling and keeps tariffs higher than the 2.5% the UK had hoped for. Rolls-Royce engines and other aircraft components used by Boeing were granted full tariff waivers, highlighting their strategic value to the US. Steel and aluminium tariffs were lifted too, but the US intends to cap UK exports through a quota system using “most-favoured nation” rates. While this could help revive British Steel, the lack of clarity around quotas means the net benefit remains uncertain. In return, the UK pledged to increase imports of Boeing aircraft and committed to importing 13,000 tonnes of US beef and 1.4 billion liters of ethanol annually. These moves are poised to benefit US agriculture and biofuel sectors, which had previously been restricted by EU rules.
From a sectoral standpoint, the UK’s auto, aerospace, and steel industries gain the most—but not without risks. The ethanol commitment could undercut local producers, and US beef imports may pressure UK farmers. Import quality standards will remain, but the risk of future regulatory drift under US pressure looms large. Critics also warn that the UK could increasingly find itself playing by Trump’s rules. The US, meanwhile, gave relatively little away. The UK held firm on keeping services—its most lucrative export sector—off the table. And by clinging to some EU regulatory standards, the UK reduced Washington’s leverage. Still, the deal allows Trump to tout a bilateral win, reinforce his trade ideology, and put pressure on the EU.
To conclude, I think the US-UK deal benefits the US more than the UK. The US has set a tone of bilateral trade negotiation with the US-UK trade deal, which I think is the biggest motivation for the deal. This, in turn, means that the US-EU negotiation could be one of the most complicated trade negotiations. In fact, I would expect that the current trade deal would worsen the ties between the EU and UK. The neutral ground to the US-UK trade deal is that the deal must be reviewed and possibly renegotiated after 6 years and a future Democratic administration could revisit or rescind elements of the deal, especially if labor or environmental groups protest.
Written by Michael Ogunremi
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