UK-US Trade Deals “Built on Sand” as Pharmaceutical Agreement Lacks Legal Foundation
Concerns are mounting that agreements between the UK and the United States under the Trump management are unreliable,with a recent pharmaceutical deal lacking a solid legal basis and other key agreements facing delays or outright suspension.
Ministers and senior mps are expressing deep reservations about the stability of UK-US trade arrangements,following revelations that the recently announced deal to avoid drug tariffs exists largely on a verbal understanding. The “milestone” agreement on pharmaceuticals,intended to provide zero tariffs for the industry in exchange for increased NHS costs for new medicines,currently lacks a formal legal footing beyond preliminary press releases.
The fragility of these agreements has been further underscored by Washington’s decision to pause the £31 billion “tech prosperity deal,” previously touted as a notable advancement in the US-UK relationship. The suspension followed claims from the US of insufficient progress from the UK in reducing trade barriers in other sectors.
Adding to the uncertainty, concessions made to British farmers in the initial tariff deal with the Trump administration – hailed as “historic” by Labor leader Keir Starmer in May – have yet to be formally approved by the US, with a January deadline rapidly approaching.
The UK Department of Health confirmed that negotiators are currently working to finalize the detailed agreement on pharmaceutical pricing. When asked to provide the specific terms, the department directed inquiries to its press release announcing the “landmark UK-US pharmaceuticals deal” and a corresponding US government announcement describing an “agreement in principle” on pharmaceutical pricing. Though, critics have pointed out significant discrepancies between the two statements.
Relations
Layla moran, chair of the health select committee, criticized the UK government’s perceived naiveté in dealing with the Trump administration. “The only thing more surprising than Trump’s tween-level temper tantrums is the UK government’s naive belief that his administration is a good faith actor,” Moran said. “The NHS is too precious to be gambled with and the concern now is whether the deal that could already cost the UK taxpayer billions could end up costing a lot more if it collapses in chaos.”
Liam Byrne, chair of the business and trade select committee, urged ministers to prioritize the revival of the paused tech prosperity deal.
While government officials downplayed the likelihood of the US reneging on the pharmaceutical agreement – noting the pharmaceutical industry’s desire for certainty regarding imports and drug prices – they acknowledged the inherent volatility of dealing with the Trump administration. They pointed to secured outcomes such as the 25% steel tariff, which is more favorable than the rates paid by other nations, as evidence of tangible benefits. A chart comparing UK steel tariffs to those of other major economies would illustrate this point effectively.
Ongoing Implementation Challenges
However, implementation of the landmark US-UK tariff deal agreed to last May has also encountered obstacles. Quotas on beef exports, scheduled to take effect next month, have yet to receive formal approval from the US.
Tom Bradshaw, president of the National Farmers’ Union, explained, “Our understanding is that the US has not yet signed off the 13,000 reciprocal tariff rate quota. With the US already having access to our beef market for non-hormone treated beef, we are pushing to make sure UK beef producers can access the reciprocal quota from 1 January as agreed.” he warned that the quota could be used as a bargaining chip in future negotiations.
Moreover,the promised removal of tariffs on British steel and aluminum has not materialized,with a 25% tariff remaining in place despite other countries facing a 50% rate. Industry sources indicate that discussions on steel tariffs are stalled, with the US possibly using this as leverage over the UK in other areas.
Following discussions in Washington, including meetings between Trade Secretary Peter Kyle and US Commerce Secretary Howard Lutnick, officials described the talks as “very positive” and announced plans to resume negotiations on the tech prosperity deal in January. Despite this, the underlying concerns about the solidity of the UK-US trade relationship remain, raising questions about the long-term stability of these crucial economic partnerships.
