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The_US-EU_trade_deal_in_numbers_-_how_it_compares_to_UK_deal.txt
The poker hand strenghtsUS-EU trade deal in numbers - how it compares to UK deal29 July 2025ShareSaveBen ChuBBC VerifyShareSaveBBCDonald Trump has struck an agreement with the European Union that means the US will not impose the 30% tariffs - taxes - on EU imports that the US president had threatened.However, the EU will still face a new 15% tariff on the goods it sells into America.That is higher than the 10% tariffs the UK faces on goods exports to the US as part of an earlier agreement struck between London and Washington.So how does the EU agreement compare with the UK's - and are there potential economic benefits now arising for the UK?Most analysts judge the UK's agreement with the US will likely prove more advantageous to the UK than the EU's agreement with the US will be for the EU, given the UK's lower headline tariff rate.However, they also stress that the detail of the final US-EU agreement, which has not yet been published, is key - and that there remains uncertainty about how the US will treat imports from the EU of steel and pharmaceuticals.What's the difference between the deals?On the face of it, the UK's lower baseline tariff rate (10% vs 15%) could offer an advantage to UK-based firms competing with EU-based companies for sales into the US - allowing UK exports to be more competitively priced for the US market after the tariffs have been applied."In principle, the UK is in a more advantageous position than other countries – so there is the potential to benefit from this," Michael Gasiorek, director of the Centre for Inclusive Trade Policy (CITP) told BBC Verify.However, there are complexities in the two agreements and a lack of clarity around both, which make it tricky to compare them.In the case of car exports, the UK-US agreement specifies that exports of cars from the UK to the US will face a 10% tariff, which is lower than the 15% rate that will be faced by EU firms selling cars in the US.However, the UK's 10% rate only applies to a quota of 100,000 vehicles a year, which is roughly the number of cars the UK sells into the US at the moment.Each vehicle sold above that quota would be hit with the US's 25% tariff on car imports, which would be higher than the 15% tariff facing all EU car exports.In 2024 the EU sold around 758,000 vehicles to the US, almost seven times as many as the UK exported to America in that year.Getty ImagesThe UK-US agreement also says the UK will negotiate an agreement to avoid future US tariffs on pharmaceutical imports. But the US has not imposed those particular tariffs yet, and we don't know what the nature of any UK exception would be.There is also a lack of clarity about whether the US-EU 15% tariff would always apply to pharmaceuticals or not. On Sunday the US president suggested it would not, but EU commission president Ursula Von der Leyen suggested it would.Similarly, it's unclear whether the EU's 15% baseline tariff incorporates existing US import tariffs, or whether, as in the case of the UK's 10% tariff, it will be applied on top of existing import levies.The answer to that could have an influence on the relative advantage of UK exports. If the UK's tariffs are "stacked" but those of the EU are not, the overall effective tariff imposed on some EU goods could end being lower than what's imposed on some UK goods.No text of the EU-US agreement has yet been published, making it impossible to be certain at this stage.What about steel?UK steel exported to the US is currently subject to a 25% tariff, which is lower than the 50% global rate on imports of the metal imposed by Donald Trump in June.The president granted the UK this partial exemption to allow time for implementation of the US-UK trade deal.UK officials are working with their US counterparts to resolve technical issues that they hope will mean UK firms will be able to export steel to the US up to a certain quota that avoids even this 25% tariff.Meanwhile, US officials have briefed that under the EU-US deal, EU steel will remain subject to the US's global 50% tariff on metal imports.That would seem to significantly benefit UK steel exporters relative to their EU counterparts when it comes to selling to the US.However, the EU Commission president has also suggested that Brussels and Washington remain in talks about a quota system, whereby EU steel exports under the quota would also be subject to a lower rate.That could ultimately erode any relative advantage for UK steel manufacturers.In theory, EU manufacturers - in steel and other sectors - could move some of their production to the UK to benefit from lower tariffs when exporting to the USBut some analysts are sceptical about the likelihood of this."I doubt companies in modern supply chains are going to make big, long-term relocation decisions based on marginal tariff differences," says David Henig, the UK director of the European Centre For International Political Economy (ECIPE)."To take advantage of any such tariff differences businesses need to feel reasonably secure that the differences will last. Given the uncertainty surrounding US trade policy, that certainty is currently not there," agrees Michael Gasiorek.What about wider economic impacts?The US is the UK's single largest national trade partner.In 2024, the UK exported ￡196bn of goods and services to the US, 22.5% of all exports.However, the countries of the European Union collectively account for a larger share of UK trade than the US.In 2024, the UK exported ￡358bn of goods and services to the EU, 41% of all exports."Demand for EU exports from the United States is likely to fall and, if that were to lead to a slowdown in the European Union, that would be bad for the United Kingdom as it would lead to a reduction in demand for our exports from our largest trading partner," Stephen Millard from the National Institute of Economic and Social Research (NIESR) told Verify.Most economists also expect Trump's tariffs to ultimately slow the growth of the US economy, which would also harm UK firms exporting to the US.What do you want BBC Verify to investigate?US economyUK economyDonald TrumpTrade
