As many watch the unfolding tariffs saga, what we are witnessing may well be one of the most audacious acts of economic coercion in recent memory — a flexing of transatlantic muscle not seen since the height of Cold War trade diplomacy.
The UK’s decision to align with U.S. tariff demands marks a pivotal moment for post-Brexit Britain.
And the fallout may be sharpest for the economic backbone of the UK: its SMEs.
In May 2025, the UK government announced a new trade agreement with the United States. The deal includes reduced tariffs on British steel, aluminium, and vehicles.
It further opens a $5 billion export opportunity, notably in agriculture.
However, this move has sparked debate, particularly concerning its impact on SMEs.
1. Biggest Concern: Agriculture
The deal, welcomed with pride and joy by the exporters, has been deemed worrying for farmers.
This agreement, in fact, has put particular emphasis on American beef.
The deal grants tariff-free access for 13,000 metric tonnes of U.S. beef to enter the UK market.
While the UK government has maintained its ban on hormone-treated beef, experts warn that enforcement is complex and costly.
As a consequence, there emerge fears about the potential for such products to enter the supply chain despite the presupposed ban.
Why?
Enforcement would require a robust and costly monitoring system, which could strain the resources of UK border and food safety authorities.
Also, with the UK’s departure from the EU, the regulatory alignment is no longer as strong, and there’s less collaborative pressure to ensure consistent standards.
The National Farmers’ Union (NFU) has expressed apprehension over the deal.
Experts note that the inclusion of significant volumes of U.S. beef and bioethanol could undercut British farmers.
This situation echoes earlier trade agreements, such as the 2021 Australian meat deal, which led to sharp rises in imported meat and left British agriculture feeling sacrificed.
As the UK navigates its post-Brexit trade landscape, the implications of this deal raise critical questions about food standards, enforcement capabilities, and the long-term viability of domestic agriculture.
Scotland’s premium meat producers, already squeezed by trade uncertainty, face an uphill battle to compete. Meanwhile, England’s domestic farming sector—under pressure from rising land taxes and declining subsidies—may be pushed further to the margins.
The reality? The UK may soon find itself flooded with lower-standard imports, with pricing pressures and global supply chains sidelining local producers.
What’s on our plates in five years might be cheaper — but at what cost to health, sustainability, and the very sovereignty Brexiteers fought so hard to reclaim?
2. Biggest Loser: Intellectual Property, Creativity and The Tariffs
From the perspective of the UK’s £2 billion film industry, the deal is a significant setback. The US proposes a 100% tariff on foreign-made films. This is for sure a direct threat, potentially crippling the industry.
On the digital front, the UK’s Digital Services Tax (DST), which targets large tech firms like Amazon, Google, and Meta, remains firmly in place.
While this tax was designed to ensure that these companies contribute fairly to the UK economy, it has sparked criticism in the US, and branded an “unfair targeting of American businesses”.
Despite the UK’s insistence on maintaining this levy, the broader trade deal does not offer any meaningful concessions or new opportunities for the UK’s growing AI and digital services sectors.
In fact, the potential dilution of digital regulations and concessions to U.S. tech firms may even pose long-term challenges for the UK’s future growth in these areas.
Additionally, the agreement could result in tighter intellectual property protections, particularly for U.S. companies, which might undermine the UK’s own IP regulations in key areas such as copyright and patent enforcement.
Furthermore, while the trade deal does promise to simplify export procedures for British businesses, this is largely a token gesture.
In the context of the creative and tech industries, these measures do not provide any substantial boost.
Ultimately, this deal seems to favour UK traditional and corporate manufacturing sectors, while offering little to nothing of real benefit to the UK’s creative and tech industries.
3. Strategic Winner: the UK Corporate Automotive and Aerospace Manufacturing
In contrast to the agricultural sector, the UK’s large-scale manufacturers—particularly in automotive and aerospace—emerge as clear beneficiaries of this deal.
The agreement includes provisions that lift tariffs on UK-manufactured cars exported to the U.S., with an annual quota of 100,000 vehicles enjoying zero-duty access.
For major players such as Jaguar Land Rover and Aston Martin, this opens up a lucrative channel to reach the American luxury and performance market at a more competitive price point.
This is an understandable choice. Jaguar Land Rover and Aston Martin are two cornerstone employers in the UK automotive sector, supporting around 44,000 jobs combined across facilities in the Midlands, Wales, and the North.
However, both firms rely heavily on exports to the US and Europe—markets that consistently rival each other in size and importance.
While trade access to the US offers growth potential, especially for high-end models, it is European supply chains and regulatory alignment that still underpin current operations.
This raises a critical question: what happens if the EU retaliates with counter-tariffs—or even extends them to cover goods tied to US interests?
These companies also benefit from substantial government support—over £25 million in recent years—highlighting their strategic importance. For thousands of skilled British workers, any disruption to trade balance or regulatory clarity risks far more than quarterly sales—it risks livelihoods. Therefore, these choices are understandable.
Similarly, aerospace firms like Rolls-Royce and BAE Systems are to gain from tariff relaxations on aircraft parts and technologies. The UK government claims this will bolster a £2.7 billion annual export flow and create new “high-skill” jobs in strategic regions such as the Midlands and the North East. Again. These are sectors that need to remain protected for the sake of the UK workforce well well-being.
Trickle-down. Another myth?
These sectors are capital-intensive and already dominate government industrial support schemes.
The trickle-down effect on smaller component manufacturers and engineering SMEs is likely to be slow and uneven if it ever happens.
Only firms already embedded in high-value supply chains—those with ISO certifications, export licenses, and U.S.-ready compliance protocols—stand to benefit in the short term.
For smaller manufacturers that lack those credentials, the new deal may offer little relief.
Increased regulatory divergence from the EU could add friction, and many SMEs lack the administrative and financial capacity to navigate dual compliance regimes.
As trade alignment drifts from Brussels to Washington, small exporters may find themselves squeezed between incompatible rulesets.
This trade agreement, much heralded by government officials, ultimately represents a fundamental realignment of the UK’s economic priorities.
While large manufacturers may stand to gain, the real price of this deal is likely to be paid by sectors that have long been considered integral to the UK’s future — its agricultural industries, its creative sector, and its SMEs.
The government’s decision to placate U.S. interests at the expense of domestic sovereignty risks further diminishing the UK’s control over its own economic destiny.
What we see unfolding is not simply a trade agreement but a pivot away from the values of economic independence and fairness that were central to Brexit’s rhetoric.
As the UK continues to navigate its post-Brexit reality, one question remains: has it truly negotiated its way to independence, or merely traded one form of dependency for another?
Long Term vs Short Term: What to expect
The UK’s new trade deal with the United States presents opportunities and serious challenges for the economy. While sectors like corporate automotive and aerospace manufacturing may see immediate benefits, the fallout for SMEs, the creative industries, and agriculture could be profound.
The government’s ability to police food imports, safeguard intellectual property, and -something we have not talked about but are closely monitoring- protect workers’ rights remains uncertain.
Without robust mechanisms in place, the UK risks becoming overly dependent on U.S. interests, potentially sacrificing economic independence and fairness for short-term gains.
The long-term impact of this trade deal on the UK’s economic sovereignty, particularly if it sidelines key industries, could create significant friction in the country’s post-Brexit reality.
As the economic landscape continues to shift, it’s crucial for businesses—especially SMEs and those in the creative sectors—to stay informed and adapt quickly to these changing dynamics.
If you want to navigate these complexities and stay ahead of the curve, sign up for our Internationalisation Course and Resources. We’re closely monitoring the situation and offering in-depth insights and strategies to help you thrive in an increasingly interconnected world.
Don’t let your business fall behind—join us and gain the tools to successfully internationalise in the current global trade environment.
