Here we examine the trade deals the UK has recently agreed with the EU, India and, of course the US, though it's uncertain what effect, if any, the American courts' recent tariff rulings will have.
During May a number of trade deals were agreed with consequences for the UK agricultural sector.
UK:US
On 8 May 2025, the UK agreed an historic trade deal with the US in what the US has described as providing ‘American companies unprecedented access to the UK markets while bolstering US national security’, and what the NFU has described as the UK agricultural sector having been ‘singled out to shoulder the heavy burden of the removal of tariffs for other industries in the economy’.
The deal granted tariff concessions on British cars (the 27.5% tariff will be reduced to 10% for up to 100,000 vehicles annually) and steel and aluminium (elimination of the 25% tariff). In exchange, Sir Keir Starmer has opened the gates for a range of US goods that had previously been subject to trade barriers including beef and ethanol.
- Beef: Previously, American beef was subject to tariffs of up to 20%, now, up to 13,000 metric tonnes can be traded tariff free. Currently, the US exports about 1,000 tonnes of beef to the UK said to be worth around £21 million annually while UK beef exports are worth £2.9 million per year according to the Agriculture and Horticulture Development Board. Prior to the deal, there were concerns circulating over whether any potential agreement could allow hormone-treated beef into the UK market. UK food safety laws restrict this, and the US has committed to maintaining high standards for beef quality and safety which is welcomed by UK livestock farmers.
- Ethanol: The agreement waved through tariff-free access (previously a 19% import tariff) on 1.4 billion litres of US ethanol – a figure equating to the size of the UK’s entire ethanol market. UK bioethanol processing plays a crucial role in decarbonising the power sector. The impact of the deal is trifold:
- The UK’s two largest plants can take 2 million tonnes of feed wheat per year but, historically, this figure has been 1.2 million tonnes (representing 7% of UK wheat production forecasted this year). If this market were unavailable, the wheat would need to be exported, and could result in a loss of £150-200 million for UK farmers, according to the Agricultural Industries Confederation (AIC).
- DDGS (dried distillers grain with solubles) is a protein animal feed and a co-product from bioethanol production. The two plants produce around 600,000 tonnes per year. The UK annual demand is 500-800,000 tonnes and AIC states that without domestic production this would add around £35 million to the cost of ruminant livestock imports.
- 80% of the UK’s CO² is produced from the bioethanol process, used in numerous sectors including healthcare, food packaging and drink.
The government needs to now consider the impact of this trade deal and how it can maintain the competitiveness of the sectors and UK domestic production.
UK:EU
The EU agri-food market is important due to its proximity – the NFU states 68% of the UK’s total exports were destined for the EU in 2024 and EU goods represented just over 70% of all imports to the UK.
The UK:EU trade deal is seen as a key moment in beginning to reset post-Brexit relations and is expected to boost the UK economy by £9 billion by 2040. The deal included a sanitary and phytosanitary agreement and while there are positives, there are concerns that the UK is surrendering any voice to the EU.
A reduction in checks on animal and plant products will make it easier for UK farmers to export food to the EU and for the first time since Brexit the UK will be able to sell products such as raw burgers and sausages in the EU again. There are concerns, however, that the removal of some border checks could increase the risk of disease spread.
The UK and EU will link their Emissions Trading Schemes (ETS) to avoid taxes on carbon-intensive goods like steel and cement travelling between the UK and EU. The agreement includes mutual exemptions from the EU Carbon Border Adjustment Mechanism (CBAM) and the forthcoming UK CBAM. While CBAM doesn’t cover agriculture products it does have fertiliser in its scope – this could be very relevant for UK farmers.
UK:India
On 6 May 2025, the two countries signed a free trade agreement. This agreement is expected to boost UK GDP by £4.8 billion each year. While current exports to India within the red meat and dairy sectors have been small, imports are non-existent. The trade agreement does present an opportunity for the UK to export to a growing economy.
Currently there are substantive tariffs on exports to India: 30% for fresh/frozen beef, lamb and pork; for dairy it is 42% for milk powders, 40% butter and 32% cheese. The trade agreement will see India cut levies on 90% of British products including whisky, food and electrical devices, and tariffs on automotive exports to India will be reduced from 100% to 10%. In response, the UK is eliminating tariffs on 99% of Indian exports. While food standards will not be compromised, detail is required on how specific agricultural and food products will be impacted.
In all situations, the detail will be vital in understanding the impact and implications of these trade deals. There will be positives; however, we must ensure we understand the unintended as well as the intended consequences and be prepared.
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