section_path: Trade conflicts by country/Europe/United Kingdom
section_name: United Kingdom
paragraph_text: United Kingdom
  
  The United States ran a trade surplus with the United Kingdom in 2024 and assigned the UK its lowest "reciprocal tariff" rate of 10%. However, the US was the UK's largest export market for cars and second largest for steel products, and the UK was hit hard by Trump's 25% tariffs on these sectors.
  
  In March 2025, the UK chose not to retaliate against the US metal tariffs. Chancellor Rachel Reeves of the Labour Party said there were ongoing discussions to reduce the UK's Digital Services Tax (DST) to avoid further trade friction. Introduced in 2020, the UK DST levies a 2% tax on large digital firms, primarily impacting American tech companies and generating approximately £800 million annually. The Liberal Democrats criticized the proposal, describing it as a "tax handout to Elon Musk, Zuckerberg, and other US tech barons," and advocated for raising the rate to 6% instead.
  
  Prior to the reciprocal tariff announcement, the UK submitted a draft proposal offering to lower its DST in exchange for reduced US tariffs on steel, aluminum, and cars, but did not secure a deal. The government began researching retaliatory tariffs and solicited input from British businesses on the least domestically harmful options.
  
  On April 15, 2025, Vice President JD Vance said there was a "good chance" a US–UK trade deal could be reached. However, by April 29, US officials reportedly viewed talks with the UK as a secondary priority. On May 5, 2025, President Trump threatened to impose 100% tariffs on foreign-made films, posing a serious threat to the UK's film industry. Prime minister Keir Starmer faced renewed pressure to negotiate.
  
  On May 8, Trump announced he had reached the first trade deal of his second administration with the UK. Under the framework, the US would eliminate tariffs on British airplane parts and metals up to a quota and reduce tariffs on 100,000 cars from 25% to 10%. In return, the UK would eliminate tariffs on US ethanol and allow up to 13,000 metric tons of US beef—up from a previous cap of 1,000 tons at a 20% tariff. The deal did not alter the UK's food safety standards, leaving hormone-treated US beef ineligible for import, and it did not modify the UK's DST or 10% tariff on American cars.
  
  While US Trade Representative Jamieson Greer said other countries should consider the framework as a model and that it was "the exact type of deal we should be making", analysts described the deal as a "very small win" that kept the 10% minimum tariff largely in place. Conservative Party leader Kemi Badenoch described it as "better than nothing but it's not much," criticizing the Labour government for settling rather than pursuing a broader free trade agreement. US automakers criticized the deal for making it cheaper to import a car from the UK than one of their cars assembled in Mexico or Canada using US parts. The deal was finalized at the 51st G7 summit.