What does the US state visit mean for the UK-US trade corridor?

The unprecedented second state visit by a US president to the UK came amid the implementation of President Trump’s sweeping tariff strategy, which has resulted in the average effective US tariff rate increasing from just 2.4% in January to 18.6% in August - the highest since 1933.

Against this backdrop, the visit was an opportunity for the UK to deepen its economic ties with its closest ally, including by building on the UK-US Economic Prosperity Deal, announced in May. While little further progress was made on tariffs, other substantial deals were announced by the two leaders in the company of major investors from both sides of the Atlantic.

Tech Prosperity Deal

One of the most eye-catching outcomes of President Trump’s visit was the announcement of the Tech Prosperity Deal - a forward-looking agreement designed to accelerate cooperation in emerging technologies between the UK and US.

Major focus areas of the deal include artificial intelligence and quantum computing, with both countries combining expertise and resources to support joint research schemes, develop industry standards and strengthen critical infrastructure.  

The announcement of the deal was accompanied by a £150 billion “investment package” from US companies, which the UK government is calling “the largest of its kind in British history”.

The investment pledges include forward commitments over the next decade and are concentrated in the sectors highlighted in the UK’s Modern Industrial Strategy, including life sciences, defence, advanced manufacturing and digital technology. This includes the construction of new high-capacity data centres in the UK, support to help scale-up UK AI start-ups and initiatives to advance the UK’s quantum computing capabilities.

The government confirmed that more than 7,600 high-quality jobs will be created across the UK, with significant roles in Belfast, Glasgow, Warrington, the Midlands and the North East.  Taken together with parallel UK government and private-sector commitments to invest in the US over the next five years, the overall bilateral commercial package amounts to £280 billion. 

The UK government also unveiled the creation of an AI Growth Zone in the North East of England, with much of the relevant US investment under the deal directed to this region. The Growth Zone will serve as a hub for AI research and technology development and is forecasted to produce more than 5,000 new jobs. Growth Zones are sites designated as being appropriate for housing AI-enabled datacentres because of their access to energy infrastructure and suitability for development.

For the UK, the deal represents both a strategic investment in competitiveness in emerging technologies and a deepening of transatlantic economic cooperation. The agreement also provides a platform to scale innovation and position the UK to play a leading role in shaping the global adoption of transformative technologies.  

Nuclear Energy 

The UK and US also announced a range of commitments on civil nuclear energy during President Trump’s state visit, which the UK government has said “will turbocharge the build-out of new nuclear power stations in both countries”.

The agreement aims to speed up regulatory approval for nuclear projects by allowing safety checks undertaken in one country to be used by the other to support the determination made by regulators. It is hoped that this will reduce approval times from up to four years to approximately two. 

Alongside the agreement, several major commercial deals were announced, including plans for up to 12 advanced modular reactors to be built in Hartlepool (creating up to 2,500 jobs), data centres powered by small modular reactors to be developed in Nottinghamshire, and one of the world’s first micro modular nuclear plants to be established at the London Gateway port.

These projects represent billions of pounds in investment and are central to the UK government's "clean energy superpower" mission. The partnership aims to enhance energy security and reduce reliance on foreign energy sources, specifically eliminating dependence on Russian nuclear material by the end of 2028. Collaboration extends to fusion energy, with joint experimental programmes utilising AI to develop advanced simulation tools and fast-track progress towards commercial fusion power. 

So where does this leave the UK-US 'trade deal'?

The UK-US Economic Prosperity Deal (EPD), signed in May, represents a significant development in the bilateral economic relationship. While it does not deliver the trade liberalisation of a comprehensive free trade agreement, it nonetheless provides tangible benefits through securing reductions in US tariffs, including the lowest ‘reciprocal’ US tariff rate of 10% on most goods. It also commits the US to reduced rates of duty on automotive goods (25% down to 10%, within a quota of 100,000 vehicles), 0% on some aviation goods and promises to work towards cutting steel tariffs to 0%.

The absence of any new tariff concessions being announced during the visit will be disappointing for some sectors, but both sides did reaffirm their commitment to the EPD as a living framework for future cooperation, including on tariffs.

Moving forward, several aspects of the EPD will require negotiation including commitments on security cooperation and economic resilience. For the UK, the continued success of the EPD will mean avoiding the imposition of any further US sectoral tariffs, including in relation to pharmaceutical exports, which were expressly highlighted in the original deal text as goods to be in receipt of preferential treatment.

What about steel and aluminium?

One of the key aspects of the EPD was the elimination of US tariffs on UK steel and aluminium imported to the US. The text of the original deal pledges the US to reduce the rate to zero but this has still not been implemented, with the tariff rate remaining at 25%. Despite hopes that the state visit might result in further tariff relief, progress in this area appears to have been put on hold indefinitely.

It is believed that a combination of issues, including on supply chain security and the steel sector’s transition to electric arc furnaces, have led to little progress being made on this issue during the visit. However, the UK is nevertheless in a relatively more favourable position than most other countries, which are facing US tariffs at a rate of 50%. The UK steel sector accounts for 6% of total exports by volume to the US, and 9% by value.  

What should businesses be doing now?

The US state visit was a net positive for the UK-US bilateral trade relationship, resulting in some genuinely meaningful new investment announcements. However, further progress on US tariffs was notably absent, despite continued assurances from the UK government that the EPD is a framework for further improvements to be made.

The unresolved steel and aluminium tariffs, despite ongoing negotiations, continue to hinder UK exports. Similarly, exporters of other goods, including vehicles, are still subject to an additional 10% tariff which did not exist in January. In addition, changes to the US’s de minimis rules are also resulting in duties being levied on imports of lower value shipments for the first time. As negotiations continue and implementation progresses, UK businesses should monitor how the EPD and broader changes to the global tariff landscape impact their operations and continue to reshape cross-border trade. 

There are however opportunities in these announcements for UK businesses to explore. The scale of US commitments in AI and nuclear technology will come as a significant boost to these already fast-growing sectors, providing businesses with an opportunity to position themselves at the forefront of the technological development which will define the coming decades.

In AI, investment from large US tech firms will accelerate the build-out of critical infrastructure, driving demand for partnerships, supply chain participation and specialist services across data, cybersecurity and advanced analytics. In nuclear, transatlantic projects - including advanced modular reactors - promise not only to deliver clean, secure power but also to anchor high-value manufacturing, engineering and construction roles within the UK. 

By aligning with these investments and developing the skills and capacity required to serve them, businesses can both capture immediate growth and embed themselves in sectors central to the UK’s long-term industrial strategy. 

For support in understanding how recent developments in trade policy could impact your business, Deloitte’s specialists are on hand to help.