The news of a trade deal between the UK and the US has been greeted with jubilation by Welsh government figures.
“The US is our second largest export partner and today’s announcement is an important step towards improving the trade relationship for the 1000 Welsh businesses which exported goods to the country last year,” said First Minister Eluned Morgan.
The deal itself will be something of a balm to the beleaguered UK steel industry, as Port Talbot’s iconic Tata Steel transitions to greener production methods and hopes to secure its future long term. Ms Morgan singled out the removal of tariffs as a significant win for Wales.
Further, the automotive industry in Wales will benefit from the US’s commitment to reducing tariffs on British car exports from 27.5% to 10% up to 100,000 cars. This will be welcome news to the many thousands of people in Wales working in the production of car components and systems in the country, and for automotive retailers.
“We promised to protect British car makers and save our steel. This deal delivers on that promise” said Jo Stevens, Secretary of State for Wales.
The agricultural sector could be impacted by the significant expansion of beef imports into the UK – with red meat being a major Welsh export – although the Farmer’s Union of Wales has welcomed “the Uk government’s assurance that this agreement will not compromise food, environmental or animal welfare standards.”
Accompanying uncertainty in the pharmaceutical sector remains, however, with the spectre of future tariffs still present, despite US hints of preferential treatment for the UK. With life sciences an important sector in Wales, the deal is light on good news for these businesses.
Welsh fintechs and tech companies could benefit from plans to increase cooperation through a future digital trade deal.
As a commercial law firm, we advise a large number of businesses that will be impacted by the deal across sectors. What stands out most at this stage is the lack of substantive detail beyond the headline topics, and we look forward to seeing the agreement signed and sealed. Of particular interest to our clients will be the outcomes of the many areas of negotiations that are still ongoing, for example in technology.
Crucially, 10% tariffs remain on most UK exports to the US. For now, we welcome the arrival of more clarity in the trade relations with the US, Wales’ largest trade partner by country, with guarded optimism. However, with a lack of a signed and finalised deal, questions still remain over any future regulatory changes that may result. After all, the EU is Wales’ largest trading partner overall, and further regulatory divergence could complicate the UK government’s efforts to reset relations with Europe.
Our clients will look for further details in the weeks and months to come, as Welsh businesses, like businesses around the UK, grapple with the recent seismic changes to global trade.
