New Trade Deal between the US and the UK
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On March 22, 2022, the US and the UK entered into a trade agreement to end the US tariffs on UK steel and aluminum
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In exchange, the UK will lift the tariffs it levies on distilled spirits, farmed products, and consumer goods
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The US imposed tariffs on steel in March 2018 on several countries, using a national-security provision contained in a 1962 trade law
New Trade Deal between the US and the UK
On March 22, 2022, the US and the UK announced a new trade agreement to end tariffs on the UK's steel and aluminum, while the UK will stop levying tariffs on US whiskey, motorcycles, tobacco, and other products. The announcement will benefit the steel and aluminum companies and their employees in both countries and help counter unfair trade practices. The agreement will allow 500,000 tonnes of steel annually to be imported duty-free, with higher volumes subject to tariffs. The new rules will go into effect on June 1, 2022.
Tariffs and Retaliatory Tariffs in 2018
In 2018, the US had levied tariffs on several products, including a 25% tariff on steel and a 10% tariff on aluminum imports to safeguard US industries. The UK imposed tariffs on several products from the US in a retaliatory measure, including Harley-Davidson motorcycles, bourbon, and Levi's jeans. The new agreement has ended the old tariffs between the two countries, and it will help improve the trade in goods between them, valued at around $117 billion in 2021. The US businesses that use imported steel and aluminum will be able to get them at a lower cost, and it will also help reduce the country's soaring inflation.
Since the US imposed tariffs in 2018, the import of steel from the UK averaged 243,757 tonnes annually. This is much lower than the average of 636,468 tonnes imported annually in the five years before the imposed tariffs. Similarly, the retaliatory tariffs affected the US whiskey industry; the export of US whiskey to the UK declined 53% in value terms during 2018-2020.
Keeps Unfair Trade Practices in Check
The new agreement will also help counter unfair trade practices. According to the deal, the UK will provide an attestation, based on a third-party audit, to the US about any UK steel producer owned or controlled by a Chinese entity to avoid market-distorting practices as China is the world's largest exporter of steel and aluminum. The recent economic slowdown in China resulted in a surplus of steel and aluminum in the country, with the government exporting the materials at meager prices to undercut other players.
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