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Donald Trump is poised to sign off crucial parts of the US-UK trade deal that will deliver lower tariffs for British car exports to America in return for improved access to the UK for US beef and ethanol producers.
The “cars for agriculture” deal comes more than a month after Trump and Sir Keir Starmer signed off the five-page Economic Prosperity Deal in a televised Oval Office press conference on May 8.
UK officials close to the talks said that the two sides were still negotiating over the section of the deal that Starmer said would deliver zero-tariff access to the US for UK steelmakers.
The Starmer administration has come under political pressure at home over the speed of implementation of the agreement, as well as facing claims from the UK bioethanol industry that the offer of a large zero-tariff quota to US ethanol producers risks putting them out of business.
UK officials are now hopeful that the deal could be signed by the end of the week. “The proclamation is sitting on the president’s desk,” said one, brushing off complaints about the pace of implementation.
“Compared to other negotiations and agreements this is being done at lightning speed,” they added.
Early on Thursday morning, US commerce secretary Howard Lutnick said the deal would become active “in the coming days”.
He wrote on X: “It was a pleasure to meet our great ally, the Prime Minister of the UK, at Downing Street yesterday.
“We agreed to implement our historic trade deal as soon as possible, starting with the agreed quotas for UK autos, and US beef and ethanol, becoming simultaneously active in the coming days.”
The UK remains the only country to have signed a deal with the US following Trump’s imposition of global “reciprocal tariffs” on April 2.
The US administration is currently locked in negotiations with other countries after instituting a 90-day pause that was due to expire on July 9. The tariffs are subject to a legal challenge in the US.
Under the terms of the UK-US pact, Trump agreed to cut a 27.5 per cent tariff on cars to 10 per cent for the first 100,000 vehicles shipped from the UK, in a move that was widely welcomed by auto groups such as Jaguar Land Rover and Bentley.
In return, the UK offered the US a zero-tariff quota of 13,000 tonnes of beef and 1.4bn litres of ethanol. UK officials confirmed that the legal steps were in place to operate the quotas simultaneously with the cuts to US car tariffs.
The bosses of the UK’s only two bioethanol plants warned last month that the 1.4bn litre quota for cheaper US ethanol — equivalent to entire annual demand in the UK — would force them to close their plants.
The two plants — Ensus in Wilton on Teesside, and Vivergo in Saltend, near Hull — manufacture bioethanol used in standard E10 petrol in the UK and were already making losses prior to the deal with the US being struck.
The UK’s Department for Business and Trade said three weeks ago that it was “working closely” with the companies to “consider what options may be available” to support them, though so far no solutions had emerged.
UK steelmakers are still waiting for the outcome of talks to finalise the size of the quotas as well as the conditions under which UK producers can benefit from a deal. The industry said it was not expecting an agreement until the end of the month at the earliest.
Tata Steel, the UK’s largest producer, has warned that it might be excluded from the tariff-free deal with the US because of the origin of some of its products.
After closing its two blast furnaces at Port Talbot last year, Tata has been importing steel from its sister plants in India and the Netherlands for processing in the UK to then ship to customers.
However, this could breach US import rules that require all steel to be “melted and poured” in the country from which it is imported. Other UK producers are also expected to be excluded from the deal if the condition is applied.
UK Steel, the industry trade body, said it hoped the “US administration will recognise the particular circumstances of our industry, especially as the volumes we send to the US are a tiny proportion of US imports, but highly significant for UK producers”.
