How Could the US-UK Trade Deal Affect Sustainability?
The US and UK have agreed to a substantial trade deal that could affect sustainability in a variety of ways.
Ethanol entering the UK from the US will face no tariffs under a new trade deal between the two countries.
This renewable biofuel can reduce emissions and use of fossil fuels.
Tariffs on cars, including EVs, have been cut from 17.5% to 10% on a quota of 100,000 UK cars.
UK Prime Minister Keir Starmer said: “The new global era demands a government that steps up, not stands aside.
“This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel.
“My government has put Britain at the front of the queue because we want to work constructively with allies for mutual benefit rather than turning our back on the world.”
US President Donald Trump said: “The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers.”
What’s in the US-UK trade deal?
The trade deal primarily covers cars, steel and agriculture.
The UK steel industry will no longer face tariffs on US exports, being negotiated down from 25% to zero through this deal.
This just weeks after the British industry was on the brink of collapse, with the government taking control of British Steel from Jingye Group to prevent the closure of a plant in Scunthorpe.
The deal also agreed reciprocal market access on beef, with a tariff free quota for UK farmers of 13,000 tonnes.
Ongoing negotiations will look to address other sectors, the UK government says, like pharmaceuticals and remaining reciprocal tariffs.
UK Business and Trade Secretary Jonathan Reynolds said: “I am delighted our calm approach and proactive engagement with the US has resulted in this deal which cuts tariffs for UK industry and cuts costs for businesses.
“Businesses across the country will be glad to see our approach working, but this is only the beginning.
“We look forward to strengthening our trading relationship with the US through a wider economic deal, which will help us to deliver on our Plan for Change to provide economic stability and make this country fit for the future.”
US ethanol production
Ethanol is often mixed with gasoline to improve fuel octane ratings, but can also be used in power generation.
In 2024, US ethanol production reached 16.1 billion gallons in 2024 and production capacity is as high as 18 billion gallons.
The Midwest, particularly states like Iowa and Nebraska, dominate production as lots of farmland is used to grow corn.
The country is also a major ethanol exporter with record shipments in early 2025.
A statement from the White House said this deal will create a US$700m opportunity in new ethanol exports.
More sustainable cars
The deal represents a significant turning point for the electric vehicle industry on both sides of the Atlantic.
With car export tariffs slashed from 27.5% to 10% for up to 100,000 UK vehicles annually, British EV manufacturers stand to gain substantial competitive advantages in the crucial American market.
Contrastingly, European car manufacturers will face 25% tariffs when exporting to the US.
For British steel producers, the elimination of the 25% tariff is equally transformative for EV production.
Electric vehicles require specialised high-grade steel for battery enclosures and structural components that prioritise both strength and weight reduction.
The zero-tariff arrangement ensures UK steelmakers can now supply these critical materials to both domestic and US electric vehicle manufacturers without the previous cost disadvantages.
Adrian Mardell, CEO at JLR, said: “The car industry is vital to the UK’s economic prosperity, sustaining 250,000 jobs.
“We warmly welcome this deal which secures greater certainty for our sector and the communities it supports.”
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