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What could be in the UK-US tariff deal? What is in the UK-US tariff deal?
(about 5 hours later)
The US and the UK are expected to announce a deal to reduce tariffs later. The US and the UK have reached a deal over tariffs on some goods traded between the countries.
It's thought US President Trump's blanket 10% tariffs on imports will stay, but that the UK will see cuts to the 25% tariffs on some of its biggest exports. US President Donald Trump's blanket 10% tariffs on imports from countries around the world remains in place and still applies to most UK goods entering the US.
Here's a look at what could be in the deal. But the deal has reduced or removed tariffs on some of the UK's exports, including cars, steel and aluminium.
Here's an at-a-glance look at what's in the deal.
This isn't a trade dealThis isn't a trade deal
US President Donald Trump declared on social media the announcement to come later would be a "major trade deal" - it won't be. US President Donald Trump declared on social media this announcement would be a "major trade deal" - it's not.
He does not have the authority to sign the type of free-trade agreement India and the UK finalised earlier this week - this lies with Congress.He does not have the authority to sign the type of free-trade agreement India and the UK finalised earlier this week - this lies with Congress.
Congress would need to approve a trade agreement, which would take longer than the 90-day pause in place on Trump's tariffs. Congress would need to approve a trade agreement, which would take longer than the 90-day pause in place on some of Trump's tariffs.
What it will be is some exemptions or lowering of those tariffs on specific goods. This is an agreement which has reversed or cut some of those tariffs on specific goods.
It might be quite basic What was announced today is only the bare bones of a narrow agreement.
What is announced today is likely to be only the bare bones of a narrow agreement.
There will be months of negotiations and legal paperwork to follow.There will be months of negotiations and legal paperwork to follow.
It could also be relatively short-term, covering just a few items. Car tariffs cut to 10%
Currently, most goods imported from the UK to the US face a blanket 10% tariff and that's expected to remain. Trump had placed import taxes of 25% on cars and car parts coming into the US on top of the existing 2.5%.
But this deal is likely to reduce tariffs on specific items set to be subject to higher tariffs. This has been cut to 10% for a maximum of 100,000 UK cars, which matches the number of cars the UK exported last year.
Cars will be important But any cars exported above that 100,000 will be subject to a 27.5% import tax.
Trump has already placed import taxes of 25% on cars and car parts coming into the US.
Cars are our biggest export to the US - worth about £9bn last year.Cars are our biggest export to the US - worth about £9bn last year.
What we could get later is a lowering of this 25% tariff, or a quota system. Car industry leaders have told the BBC the quota could effectively put a ceiling on the number they can export competitively.
A quota system would allow the UK to sell a certain number of cars into the US under low or zero tariffs, with extra charges on vehicles above that quota. The UK currently imposes a 10% on US car imports, but it is not yet clear if there had been any change to this.
Car industry leaders have told the BBC they would much prefer lower tariffs across the board - as a quota could effectively put a ceiling on the number they can export competitively. The US has previously demanded the import tax be cut to 2.5%, and Chancellor Rachel Reeves has indicated she is open to such a cut.
The UK currently imposes a 10% on US car imports, but is expected to lower this. Trump also announced that Rolls Royce engines and plane parts will be able to be exported from the UK to the US tariff free.
The US has demanded the import tax be cut to 2.5%, and Chancellor Rachel Reeves has indicated she is open to such a cut. He also said the UK was buying $10bn worth of Boeing planes from the US.
Steel and aluminium pact No tariffs on steel and aluminium
A 25% tariff on steel and aluminium imports into the US came into effect in March. Prime Minister Keir Starmer said the UK would "keep all options on the table", but did not announce immediate retaliation. A 25% tariff on steel and aluminium imports into the US that came into effect in March has been scrapped as part of this deal.
This is huge news for the firms such as British Steel which was brought under government control as it struggled to stay operational.
The UK exports a relatively small amount of steel and aluminium to the US, around £700m in total.The UK exports a relatively small amount of steel and aluminium to the US, around £700m in total.
However the tariffs also cover products made with steel and aluminium, including things such as gym equipment, furniture and machinery.However the tariffs also cover products made with steel and aluminium, including things such as gym equipment, furniture and machinery.
These are worth much more, about £2.2bn, or about 5% of UK exports to the US last year.These are worth much more, about £2.2bn, or about 5% of UK exports to the US last year.
Steel industry leaders have warned if the 25% tariff isn't lowered or removed it will be devastating for the industry. It's not known whether the agreement between the US and the UK will lead to a cut in the rate or the introduction of quotas. Steel industry leaders had warned if the 25% tariff wasn't lowered or removed it would have been devastating for the industry.
Tariffs could lead to US companies buying less from overseas. A knock-on effect could be more cheap steel flooding other markets, including the UK, as trade is redirected, putting more pressure on an already struggling industry. Pharmaceuticals still the big unknown
Pharmaceuticals the big unknown What will be agreed on pharmaceuticals is still unknown.
What will be agreed on pharmaceuticals is unknown. "Work will continue on the remaining sectors such as pharmaceuticals and remaining reciprocal tariffs," a statement from the UK government said.
Most countries, including the US, imposed few or no tariffs on finished drugs, as part of an agreement aimed at keeping medicines affordable.Most countries, including the US, imposed few or no tariffs on finished drugs, as part of an agreement aimed at keeping medicines affordable.
Pharmaceuticals are a major export for the UK when it comes to US trade – last year sales of medicinal and pharmaceutical products were worth £6.6bn ($8.76bn) making it the UK's second-biggest export to the US.Pharmaceuticals are a major export for the UK when it comes to US trade – last year sales of medicinal and pharmaceutical products were worth £6.6bn ($8.76bn) making it the UK's second-biggest export to the US.
It's also America's fourth biggest export to the UK, valued at £4bn ($5.3bn) last year.It's also America's fourth biggest export to the UK, valued at £4bn ($5.3bn) last year.
The president has not announced any trade restrictions on medicines yet.The president has not announced any trade restrictions on medicines yet.
There is a danger that the UK could agree a deal, but is then subsequently hit by a global tariff.
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Digital services tax olive branch No change on digital services tax
There is speculation the UK could lower its 2% digital services tax on US firms in return for lower tariffs on things like car and pharmaceutical exports. There was no change to the UK's 2% digital services tax on US firms in this deal, despite reports there coudl be.
The tax is on businesses that run social media, search engines or online marketplaces and applies to revenues derived from UK users. Businesses that run social media, search engines or online marketplaces pay this tax which applies to revenues derived from UK users.
Firms only have to pay it if they raise more than £500m in global revenues and £25m from UK users annually.Firms only have to pay it if they raise more than £500m in global revenues and £25m from UK users annually.
But this is a threshold easily met by US tech giants like Meta, Google, Apple.But this is a threshold easily met by US tech giants like Meta, Google, Apple.
The UK reportedly netted nearly £360m from American tech firms via the tax in its first year.The UK reportedly netted nearly £360m from American tech firms via the tax in its first year.
In weighing up whether to cut this tax, the UK will have had to balance its drive to raise revenue and further growth with the political risk of being seen to concede to big tech, or President Trump. Instead of any change to the digital services tax the UK and US had "agreed to work on a digital trade deal", the UK government said.
Food standards will not be included It said this would "strip back paperwork for British firms trying to export to the US opening the UK up to a huge market that will put rocket boosters on the UK economy".
Tariffs on US farm products could also be cut. However, Chancellor Rachel Reeves has been clear that food standards - for example, allowing imports of chlorinated chicken or hormone-treated beef - will not feature in this deal for domestic political reasons. No drop to food standards
This is an area where the UK has chosen alignment with EU - and the forthcoming "Brexit reset" with the EU - over the US. The UK has removed tariffs on American beef and other agricultural products, President Trump said.
UK farmers have also been given a tariff free quota for 13,000 metric tonnes of exports, which trade ministers said was the "first time" UK famers had been given this kind of deal.
There will be no weakening of UK food standards on imports, the UK government statement said.
Many American farmers use growth hormones as a standard part of their beef production, something that was banned in the UK and the European Union in the 1980s.Many American farmers use growth hormones as a standard part of their beef production, something that was banned in the UK and the European Union in the 1980s.
The US has previously pushed for a relaxation of rules for its agricultural products, including beef from cattle that have been given growth hormones.The US has previously pushed for a relaxation of rules for its agricultural products, including beef from cattle that have been given growth hormones.
It would be seen as a diplomatic win for the UK if the US has accepted even a narrow deal while dropping demands in this area. This is an area where the UK has chosen alignment with EU - and the forthcoming "Brexit reset" with the EU - over the US.
The tariff on ethanol which is used to produce beer coming into the UK from the US has also been scrapped.
"They'll also be fast tracking American goods through their customs process, so our exports go to a very, very quick form of approval, and there won't be any red tape," Trump said.