A New Trade Deal, but Is It Really Game‑Changing for UK SMEs?
When President Trump and PM Keir Starmer rolled up their sleeves at the G7 summit on Monday, the world’s trade circles did a little happy dance. The US‑UK Economic Prosperity Deal was finally signed, and one of the fastest‑moving logistics services, Parcelhero, swooped in to say, “We’re thrilled!”
But the Numbers Say Something Else
- UK exports to the US collapsed by £2 billion in April, a 33% drop—the steepest monthly dip since 1997.
- US‑UK trade is now at its lowest point since February 2022.
- Exports to the EU fell by £600 million (4.3%).
- Overall UK exports shrank by £2.7 billion, 8.8% down across all destinations.
Why the New Deal Might Be a Mere Drop‑in the Bucket
David Jinks, Parcelhero’s Head of Consumer Research, grumbled that the deal, which slashes tariffs on car parts and gives aerospace a pass, doesn’t help the 39,500 UK businesses that ship goods to the US every year. Those merchants are tired of the 10% tariff that first hit the market on 4 April.
- The tariff still applies to virtually every item priced above the US’s $800 ($600) de‑minimis threshold—think premium clothes, fancy ceramics, and the like.
- Last year, UK shipments of apparel, ceramics, and toys to the US totaled $138.87 m, $109.37 m, and $256.75 m, respectively—each still fighting that 10% tax.
- Trump has pledged to strip that $800 ceiling for all countries, not just China. It’s still a “when, not if” question.
The Signing Snafu & What It Means
Remember the chaotic moment when Trump accidentally announced to the press that the deal was with the European Union?—and PM Starmer hurried to pick up a lobotomised paperwork—obviously, the new agreement feels more like a throw‑away contract than a solid pact.
A comprehensive US‑UK Free Trade Agreement would have been the crown jewel of Brexit, offering zero tariffs and faster customs clearance. Instead, Economic Prosperity Deal leaves many exporters dangling in uncertainty as the trade landscape continues to wobble.
Bottom Line
While the headline might cheer, behind the scenes UK SMEs are still playing a high‑stakes game of “wait and see.” The new deal may be a quick fix for car and aerospace, but for lower‑value goods, the 10% tariff remains a stubborn wall. The real win will come when a complete free‑trade framework is finally inked.
