Key Takeaways:
- The UK’s agreements with the US, including the pharmaceuticals deal, lack a solid foundation and are "built on sand"
- The deal to avoid drug tariffs has no underlying text beyond limited headline terms
- The US has suspended the £31bn "tech prosperity deal" due to lack of progress from the UK in lowering trade barriers
- Concessions to British farmers made in the first tariff deal with Trump have yet to be signed off by the US
- Critics have raised concerns about the UK government’s naive belief in the Trump administration’s good faith and the potential risks to the NHS and taxpayers
Introduction to the UK-US Trade Agreements
The UK’s trade agreements with the US, particularly those made with the Trump administration, have been called into question due to their lack of a solid foundation. The deal to avoid drug tariffs, announced this month, has been found to have no underlying text beyond limited headline terms. This has raised concerns among ministers and senior MPs, who have warned that the agreements are "built on sand". The UK’s pharmaceuticals deal with the US, which will mean the NHS pays more for medicines in exchange for a promise of zero tariffs on the industry, still lacks a legal footing beyond top lines contained in two government press releases.
Concerns Over the Pharmaceutical Deal
The health department has stated that negotiators are currently working on the detailed agreement on the pharmaceutical deal. However, when asked to provide the headline terms, the department shared its press release hailing the "landmark UK-US pharmaceuticals deal" and a link to the equivalent US government announcement of an "agreement in principle" on pharmaceutical pricing. Critics have noted that the two releases describe the deal in sharply different terms, with the British release describing the UK as "the only country in the world to secure a 0% tariff on pharmaceuticals to the US", while the American one largely focuses on how the NHS will have to pay 25% more for new medicines. David Henig, a trade expert, has expressed concerns that the UK government may have made commitments to raise drug prices in return for nothing more than a verbal promise from President Trump around zero tariffs.
Unreliable Agreements
Ministers have privately expressed concerns that the government’s agreements with the US are flimsy and unreliable. One minister stated that the UK’s series of agreements with the Trump administration were "built on sand", while another said that this instability was the "new normal now in our relationship across the pond" with "additional layers of volatility and unpredictability in the system". Layla Moran, who chairs the health select committee, has criticized the UK government’s naive belief in the Trump administration’s good faith, stating that the NHS is "too precious to be gambled with" and that the concern now is whether the deal could end up costing the UK taxpayer billions if it collapses in chaos.
The Tech Prosperity Deal
The US has suspended the £31bn "tech prosperity deal" due to lack of progress from the UK in lowering trade barriers. This deal was hailed as "a generational step-change in our relationship with the US", but its pause has raised concerns about the UK’s ability to secure concrete outcomes for businesses. Liam Byrne, who chairs the business and trade select committee, has urged ministers to focus on getting the tech prosperity deal "back on track". Government figures have downplayed the chances of the US reneging on the pharma deal, but officials admit that volatility is part and parcel of dealing with the Trump administration.
Implementation of the Tariff Deal
Issues have emerged in the implementation of the landmark US-UK tariff deal agreed last May. Quotas on beef exports that were due to kick in next month still have not been formally approved, and concessions to British farmers made in the first tariff deal with Trump have yet to be signed off by the US. Tom Bradshaw, the president of the National Farmers’ Union, has urged the government to keep pushing to get the reciprocal quota over the line before the end of the year to ensure it can’t continue to be used as a bargaining chip. The deal was to "remove tariffs on British steel and aluminium, reducing them to zero", but this aspect of the agreement has not materialized, with tariffs on British steel remaining at 25%.
Government Response
A government spokesperson has stated that the special relationship with the US remains strong and that the trade secretary held talks last week in the US with counterparts to keep up the momentum on implementing all aspects of the UK-US deal. The spokesperson highlighted the benefits of the deal, including 0% tariffs for the UK pharma and aerospace sectors and cut auto tariffs to 10% within quota, saving hundreds of millions of pounds on UK exports. However, critics remain skeptical about the UK government’s ability to secure concrete outcomes for businesses and protect the interests of the NHS and taxpayers.
