US '25% Tariffs on Steel and Cars' May Partially Exempt UK

Digital Tax Relief-Quota System Exchange

Countdown to Bilateral Trade Agreement

It has been reported that the United States is discussing with the UK government a plan to partially exempt UK products from the 25% tariffs imposed on steel and cars.

The Financial Times (FT) reported on the 6th (local time), citing UK government officials, that the two countries are expected to sign a trade agreement containing these details as early as this week. The FT reported that a plan is being actively considered to apply a quota system (import volume restriction) to UK steel and cars, applying a lower tariff rate than 25% to the quota-eligible volume. In return, the UK is reportedly negotiating to reduce the digital tax imposed on US big tech and tariffs on US agricultural products.

If the UK receives duty-free or low-rate tariffs on some cars and steel, there is interest in whether other countries, such as South Korea and Japan, which are negotiating trade agreements with the US, could receive similar benefits. However, it is also pointed out that the conditions for the UK and South Korea are different.

According to the Society of Motor Manufacturers and Traders, the UK exported £9 billion (about 15.6 trillion won) worth of vehicles to the US last year. This accounts for 27.4% of the UK's total car exports. The UK sold 180,000 tons of steel to the US. In contrast, South Korea exported $34.7 billion (about 48.54 trillion won) worth of cars and 2.766 million tons of steel to the US last year. It is said that the UK can receive a quota because it does not export much of the sensitive cars and steel to the US, but it is not easy for South Korea to receive such benefits.

Reporter Lee So-hyun y2eonlee@hankyung.com