Donald Trump unveils major deal that impacts UK households - here's what it means for you

What has been announced?

A trade deal between the UK and US, covering a host of industries, from automotive and aerospace to chemicals and agriculture.

What is the scale of the trade between the two countries?

A report from the Office for National Statistics said the US bought nearly £60billion of British-made products in 2024, or over 16% of all UK exports. But the UK also imported just over £57billion worth of goods from the US last year too. Prime Minister said the US and UK had £1.5trillion invested in each others’ countries, supporting 2.5 million jobs.

So is it a good deal for the UK?

Yes, and no. There are certainly winners from the deal, including lower import tariffs on some UK goods than would otherwise have been the case. But a whole host of UK products will still be landed with levies of 10%, and that means additional costs that weren’t in place before. Sir Keir insisted the trade deal will “save thousands of jobs in Britain”. However, tariffs will remain in place on almost all UK exports to the States, and that means added pressure on UK companies that could yet threaten job losses.

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So the overall verdict is that the government has won concessions, but the UK is worse off than before announced his “Liberation Day” tariffs.

Who will be relieved?

Car makers will be among those breathing a relative sigh of relief. The deal still includes import tariffs of 10% on UK-made cars, but that is down from the initial 27.5% imposed by Mr Trump. The 10% figure applies on the first 100,000 cars sold to the US. The 10% will still make UK made cars less attractive to US buyers, putting a potential hand brake on sales. Those at risk of being hardest hit by the original 27.5% tariff included Jaguar Land Rover, Aston Martin and Mini.

Steel makers will benefit even more, with the 25% tariff on steel and aluminium slashed to zero. While the details are limited, aerospace could also be better off. One standout is aircraft engine maker Rolls Royce, which can sell to the US tariff-free. On the flipside, President Trump said a UK company - presumably an airline - was set to announce a $10billion deal to buy aircraft from US plane maker Boeing.

What has the US got in return?

Much greater access for US firms selling ethanol, machinery, textiles and - potentially controversially - agriculture. Tariffs on US ethanol - which is widely used in our manufacturing sector - will be removed. The government said it had agreed new reciprocal market access on beef – with UK farmers given a quota for 13,000 metric tonnes Sources say imports of hormone treated beef or chlorinated chicken will remain illegal.

What will it mean for prices for UK households?

Lower tariffs should take some of the heat out of inflation, and that means prices. But tariffs are still very much in place, not just on the UK but dozens of other countries around the . Time will tell but President Trump claimed the deal would lead to “lower prices”.

What about jobs?

There have been fears that the biggest wave of tariffs for a century would lead to large scale job losses. Experts forecast that, in the UK car industry alone, more than 25,000 jobs could go if the 25% tariffs had remained. The easing of tariffs are likely to take some of the pressure off companies, but the remaining 10% tariffs could still lead to redundancies, or force firms to scale back on hirings.

What about the UK economy?

The threat of tariffs saw economists slash their forecasts for UK growth this year and next. And many think the trade deal struck with the States won’t reverse things, especially because of the wider impact of levies on the global economy, to which the UK is also exposed. Thomas Pugh, economist at audit, tax and consulting firm RSM UK, said: “The boost to growth to the whole economy from the reduction in tariffs is likely to be minimal. Indeed, the UK is still in a significantly worse position than just a few months ago.”

What has been the reaction?

Alasdair McDiarmid, assistant general secretary at the Community union, hailed the trade deal for steel makers. “This new agreement will protect jobs here in the UK, save our industry tens of millions of pounds a year and provide much-needed certainty to enable future investments,” he said.

Gareth Stace, director general at trade body UK Steel, said: “The UK Government’s cool-headed approach and perseverance in negotiating with the US clearly paid off. This deal will offer major relief to the UK steel sector at a time when it is battling numerous other challenges, not least global overcapacity, high energy costs and weak demand.”

Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders, said: “The agreement announced today to reduce tariffs on UK car exports into the US is great news for the industry and consumers. The application of these tariffs was a severe and immediate threat to UK automotive exporters so this deal will provide much needed relief, allowing both the industry, and those that work in it, to approach the future more positively.

Shevaun Haviland, director general of the British Chambers of Commerce, said: “This deal will be met with a huge sigh of relief by many British businesses. The reduction in the 25% tariffs on most of our automotive exports and the removal of levies on steel and aluminium are the biggest wins.”

Tom Bradshaw, President of the National Farmers Union, said: “For several years, we’ve campaigned with the UK’s agricultural attachés in Washington for market access for British beef, a product globally respected for its quality and strong environmental credentials. These efforts have contributed to enabling the UK government to secure ring-fenced access for British beef exports to the US. However, the inclusion of a significant volume of bioethanol in the deal raises concerns for British arable farmers. “We are working through what this means for the viability of the domestic bioethanol production and therefore the potential impact on our members.”

But James Smith, developed markets economist at ING, said: “For all the excitement about trade deals with India and the US, it’s talks with the EU that will be most pivotal for the UK.”