06-23-2025

Implementing the General Terms of the United States of America-United Kingdom Economic Prosperity Deal

Executive OrderView the Original .pdf
View the Original .pdf

The 1-Minute Brief

What: Executive Order 14309 implements a trade deal with the United Kingdom by adjusting tariffs on British goods. It creates a quota for UK-made cars to be imported at a lower tariff rate, eliminates tariffs on certain aerospace products, and paves the way for future reductions on British steel and aluminum.

Money: The order does not appropriate new funds. Instead, it alters revenue collected from tariffs. It is expected to save UK auto and aerospace exporters hundreds of millions of dollars annually by reducing the tariffs they pay to enter the U.S. market. For example, it reduces the tariff on eligible UK auto imports from a potential 27.5% down to 10%.

Your Impact: The most likely direct effect is on the price and availability of certain British products, particularly cars. US industries like automotive and steel manufacturing will face increased competition from UK imports, potentially impacting jobs in those sectors.

Status: This is a signed Executive Order, published in the Federal Register on June 23, 2025. Its provisions are legally binding and became effective on specified dates in June 2025.

What's Actually in the Bill

This Executive Order puts into action the "General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal," an agreement announced on May 8, 2025. It modifies tariffs that were previously imposed on a nearly global basis under the justification of national security. This order specifically tailors those tariffs for a key ally, the United Kingdom.

Core Provisions:

  • Automotive Imports: Establishes an annual tariff-rate quota (TRQ) for 100,000 passenger vehicles imported from the UK. These cars will face a 10% combined tariff, a reduction from the 25% tariff imposed by a previous proclamation. Imports beyond the 100,000-vehicle quota will be subject to the higher rate. Certain UK-made auto parts will also see their tariff rate lowered to 10%.
  • Aerospace Products: Completely eliminates the Section 232 tariffs on UK aerospace products that are covered under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft.
  • Steel and Aluminum: Authorizes the Secretary of Commerce to establish tariff-rate quotas for British steel and aluminum in the future. This is contingent on the UK meeting certain requirements related to supply chain security and the ownership of production facilities to prevent market-distorting practices.

Stated Purpose (from the Sponsors):

The order states its purpose is to implement the US-UK Economic Prosperity Deal, which the White House claims will bolster U.S. national security and its economy.

  1. Provide American companies with unprecedented access to British markets, especially for agricultural exports like beef and ethanol.
  2. Incentivize the United Kingdom to reduce non-tariff barriers that discriminate against American products.
  3. Address national security threats identified in previous proclamations concerning imports of automobiles, steel, and aluminum.

Key Facts:

Affected Sectors: Automotive, Aerospace, Steel, Aluminum, Agriculture.
Timeline: The automotive and aerospace tariff changes became effective in late June 2025, following the order's publication. The creation of steel and aluminum quotas is pending future action by the Secretary of Commerce.
Scope: The order's provisions apply specifically to bilateral trade between the United States and the United Kingdom.

The Backstory: How We Got Here

Timeline of Events:

The Era of "America First" Trade ([2018-2025]):

In 2018, the Trump administration began using Section 232 of the Trade Expansion Act of 1962, a law allowing the president to restrict imports that threaten national security. This led to the imposition of broad tariffs of 25% on steel and 10% on aluminum from most countries, including the UK. The rationale was that reliance on foreign metals weakened the U.S. domestic industry, which is vital for defense needs. The policy was later expanded to include a 25% tariff on automobiles and auto parts, again on national security grounds. These moves were highly controversial, triggering retaliatory tariffs from trading partners and leading to tense negotiations.

The Post-Brexit "Atlantic Declaration" ([2023-2025]):

Following the UK's exit from the European Union, both nations sought a new economic relationship. On June 8, 2023, President Joe Biden and Prime Minister Rishi Sunak announced the "Atlantic Declaration," a framework for a U.S.-UK economic partnership focused on areas like clean energy, critical minerals, and technology. This set the stage for more detailed negotiations to resolve the outstanding tariff disputes, culminating in the "Economic Prosperity Deal" implemented by this executive order.

Why Now? The Political Calculus:

  • Rewarding a Key Ally: The order serves to de-escalate a trade dispute with the UK, a critical partner in defense and security, by providing targeted relief from the broad Section 232 tariffs.
  • A New Model for Trade Deals: Instead of a comprehensive free trade agreement, this deal offers tariff reductions in exchange for cooperation on specific security issues, like ensuring steel and aluminum supply chains are free from the influence of nations deemed a security risk.
  • Addressing Industry Pressure: U.S. automakers and other manufacturers reliant on global supply chains faced billions of dollars in costs from the tariffs, creating pressure for a resolution. This order provides relief to some of the most affected sectors.

Your Real-World Impact

The Direct Answer: This directly affects specific industries—automotive, steel, aerospace—and the American workers they employ, with potential but less direct effects on consumers.

What Could Change for You:

Potential Benefits:

  • Car Buyers: If you're in the market for a UK-made car (e.g., from brands like Jaguar, Land Rover, Mini, or Rolls-Royce), manufacturers may pass on some of the tariff savings, potentially leading to modestly lower prices.
  • Aerospace Industry: U.S. aerospace manufacturers using parts from the UK will see their costs decrease, enhancing the competitiveness of the American aviation sector.
  • U.S. Exporters: The broader agreement aims to open UK markets to U.S. goods, which could benefit American farmers and other exporters.

Possible Disruptions or Costs:

Short-term ([1-2 years]):

  • Increased Competition: U.S. automakers and steel producers will face more competition from UK imports that are now cheaper. This could impact sales and profitability for domestic companies.
  • Job Security: In regions with high concentrations of automotive or steel manufacturing, increased competition could put pressure on domestic jobs.

Long-term:

  • Shifting Supply Chains: The deal may encourage U.S. and UK companies to deepen their transatlantic supply chains, potentially at the expense of ties with other regions.

Who's Most Affected:

Primary Groups: Employees and owners of U.S. and UK companies in the automotive, aerospace, and steel industries.
Secondary Groups: U.S. consumers purchasing British vehicles; U.S. farmers hoping to export more to the UK.
Regional Impact: States with a heavy presence in the auto industry (like Michigan and southeastern states) and steel industry (like Pennsylvania and Ohio) are most likely to feel the economic effects of increased import competition.

Bottom Line: This order makes it cheaper to import certain British cars and plane parts, which could be good for some consumers and businesses, but creates tougher competition for American workers and companies in the same fields.

Where the Parties Stand

Republican Position: "America First, Fair Trade"

Core Stance: Generally supportive of using tariffs as a tool to protect U.S. industries and renegotiate trade relationships on more favorable terms.

Their Arguments:

  • ✓ The use of Section 232 tariffs to protect domestic manufacturing and national security is a valid exercise of presidential authority.
  • ✓ A negotiated deal that holds an ally to specific security standards (like for steel/aluminum) is a smart way to manage trade relationships.
  • ⚠️ Some pro-free trade Republicans may dislike the underlying protectionism but view a targeted tariff reduction with an ally as a positive step.
  • ✗ Hardline protectionists may view any reduction in tariffs as a weakening of protections for American workers.

Legislative Strategy: As this is an executive action aligned with a policy priority from the Trump administration, the party's elected officials are unlikely to challenge it and would generally support the President's authority to make such deals.

Democratic Position: "Skeptical of Unilateral Tariffs"

Core Stance: The party has historically been divided on trade, but is generally critical of broad, unilateral tariffs and prefers congressionally-approved, multilateral agreements.

Their Arguments:

  • ✓ De-escalating trade tensions with a major ally like the UK is a positive development.
  • ✓ Some Democrats with pro-labor stances may support actions that aim to protect specific U.S. industries, even if through tariffs.
  • ⚠️ Many argue that the initial Section 232 tariffs were an overreach of presidential power that harmed consumers and that Congress should reclaim its authority over trade policy.
  • ✗ The overall tariff-heavy approach is seen by many in the party as economically damaging and disruptive to international alliances.

Legislative Strategy: While this specific order won't be voted on, many Democrats have co-sponsored bills aimed at limiting the president's power to impose tariffs under Section 232 without congressional approval.

Constitutional Check

The Verdict: ✓ Constitutional

Basis of Authority:

The Executive Order is grounded in powers Congress has delegated to the President.

  • International Emergency Economic Powers Act (IEEPA): Allows the president to regulate international commerce in response to an "unusual and extraordinary threat" that originates substantially outside the United States, after declaring a national emergency.
  • Section 232 of the Trade Expansion Act of 1962: Explicitly grants the President the authority to adjust imports by imposing tariffs or other measures if an investigation by the Department of Commerce finds that those imports threaten to impair national security.

Relevant Portion of the Constitution (Article I, Section 8): "The Congress shall have Power To... regulate Commerce with foreign Nations..."
Congress delegated some of this power to the President through laws like IEEPA and the Trade Expansion Act.

Constitutional Implications:

Presidential Authority: The order is a modification of a prior action (the imposition of tariffs), both of which fall within the scope of authority granted by IEEPA and Section 232.
Precedent: The use of Section 232 for national security trade actions, while infrequent for decades, was revived and used extensively by the Trump administration, setting a modern precedent for this type of executive action.
Federalism: This order deals with foreign commerce, a power explicitly granted to the federal government, and does not intrude on powers reserved to the states.

Potential Legal Challenges:

Domestic industries that feel harmed by the increased competition from the UK could potentially sue. They might argue that reducing tariffs is inconsistent with the original national security justification for imposing them. However, courts have historically given the President significant deference in matters of national security and foreign policy, making a successful challenge unlikely.

Your Action Options

Because this is an executive order, you cannot ask your representatives to vote on it. However, you can voice your opinion on the policy to the administration and support efforts to either expand or limit such actions in the future.

TO SUPPORT THIS BILL

5-Minute Actions:

  • Contact the White House: Call the White House comment line at (202) 456-1111 or use the online contact form to express your support for the U.S.-UK Economic Prosperity Deal and the tariff reductions in Executive Order 14309.

30-Minute Deep Dive:

  • Write a Detailed Email: Send a message to the Secretary of Commerce and the U.S. Trade Representative, whose offices are responsible for implementing and negotiating trade deals.
  • Join an Organization: Support groups that advocate for free trade or represent industries that benefit from the order. Examples include Americans for Free Trade, the U.S. Chamber of Commerce, or associations for the aerospace and automotive import industries.

TO OPPOSE THIS BILL

5-Minute Actions:

  • Contact the White House: Call the White House comment line at (202) 456-1111 or use the online contact form to express your opposition, arguing that the order weakens protections for American jobs and industries.

30-Minute Deep Dive:

  • Write a Letter to the Editor: Submit a letter to your local newspaper explaining how increased import competition from this order could negatively affect your community's manufacturing base.
  • Join an Organization: Support groups that advocate for protectionist policies or represent domestic producers. Examples include the Coalition for a Prosperous America or labor unions representing workers in the steel and auto industries.