July 2024 | Background of Negotiations

The U.S. Trade Representative officially announced an increase in tariff rates on certain goods from the UK (such as whiskey, ceramics, and high-end textiles) from 0-5% to 15-25%, citing the need to "balance the bilateral trade deficit." In response, the UK Trade Commission announced retaliatory tariffs on U.S. agricultural products (including soybeans, whiskey, and auto parts) ranging from 10% to 30%.

November 2024 | Three Rounds of Consultations and Key Issues

Three rounds of talks were held in Washington, London, and Geneva. The main disputes focused on market access for agricultural products (the UK requested the U.S. to relax hormone standards for beef), digital services taxes (the U.S. demanded the UK cancel its 2% digital tax), and steel and aluminum tariffs (the U.S. maintained existing tariffs citing Section 232). During this period, British cheese exporters protested against U.S. trade barriers, while the American Agricultural Machinery Association urged the government to reduce tariffs on agricultural machinery.

February 2025 | Breakthrough Progress

The U.S. agreed to reduce tariffs on whiskey from 25% to 10%, and the UK simultaneously lifted its 30% retaliatory tariff on U.S. soybeans. The digital services tax dispute was resolved through a separate Memorandum of Understanding on Digital Trade (the UK pledged to suspend the tax, and the U.S. agreed to open its cloud services market). Although no agreement was reached on steel and aluminum tariffs, both sides established a "quarterly consultation mechanism."

April 2025 | Formal Signing of the Agreement

Key contents of the final agreement:

1. Tariff Adjustments: The U.S. reduced tariffs on 60 categories of UK goods, including whiskey, ceramics, and wool fabrics, to 8-12%. The UK lowered tariffs on U.S. agricultural products (soybeans, corn), cosmetics, and medical devices to 5-10%.

2. Rules of Origin: The local content requirement for auto parts was relaxed from 62% to 55%.

3. Digital Trade: Both sides eliminated tariffs on digital products such as e-books, software, and games.

4. Transition Period: Implementation will occur in phases starting June 1, 2025, with full implementation expected by the end of 2026.

Examples of Affected Categories:

· UK whiskey: Retail prices are expected to decrease by approximately 6-8%.

· U.S. soybeans: Export costs to Europe will decrease by 12%.

· High-end cashmere products: Import tariffs will drop from 14% to 9%.

Areas Not Covered by the Agreement:

Steel and aluminum tariffs (the U.S. maintains Section 232 tariffs), financial services market access (to be addressed in future negotiations), and disputes over pharmaceutical patent protection terms.

Source: USTR official website, UK Department for International Trade briefings, WTO 25th U.S.-UK Trade Policy Review record (March 2025).