The US/UK Trade Agreement: A One-Off Special or Precedent for Other Trade Deals

By Samantha Valentino, Global Market Risk Analyst

August 14, 2025

On June 16th, 2025, President Donald Trump signed an Executive Order outlining the new United States-United Kingdom Prosperity Deal. This marks the first trade deal to be signed by the new Trump administration and the first signed since Trump announced global tariffs on “Liberation Day” ,April 2, 2025. While some details of the agreement include tangible commitments, it is mostly comprised of promises for future, undated action. More importantly, it was seen as a possible template for other trade deals, but this was not the case. Indeed, the US-UK trade deal appears to be a special deal that has not been offered to any other countries (so far).  

The details of the trade agreement are as follows: 

• The UK agrees to buy more US goods, such as beef, ethanol, and agricultural products, and remove regulations that “unfairly discriminate” against American products. 

• The US has agreed to decrease car export tariffs from 27.5% to 10% for the first 100,000 UK-produced cars to enter the US in a year. Any following cars will face an up to 25% tax. Additionally, the US committed to removing taxes on the aerospace industry from 10% to 0%- including engines and aircraft parts.  

• Additionally, the UK is the ONLY country to avoid the steel and aluminum global tariff of 50%, which the US will waive for the UK. Contingent on a Section 232 investigation, the United States will allow for special advantages for UK pharmaceuticals in US markets. They will also look to work through any future Section 232 concerns in the future, ensuring economic cooperation and predictability.  

Pointedly, this is the first US deal that has focused on the car industry, and one of the reasons observers were hoping it would be reflective of where the US was going to come out in trade negotiations with Japan and South Korea, both major auto manufacturing companies. This is a big win for the UK, especially as it promises to stabilize and perhaps grow employment in that industry.  

Additionally, the steel and pharmaceutical industries are looking at potential boosters from this deal. For the US, this deal is as significant as it reduces inequitable treatment in the UK for US producers and a boost in sales for the beef, ethanol, and agricultural sectors..    

Currently, the US has followed through in lowering tariffs for the car industry, but they have yet to lower steel tariffs. As noted above, much of the rest of the deal remains up to future deliberations.   

However, this is still a notable trade deal because it affirms the positive relationship that President Trump has with the UK. Trump’s willingness to sign a trade deal with the UK and not the EU is significant and reveals his willingness to work towards a strong economic alliance with the UK. The US will likely pursue further trade deals with the UK, especially due to expressed disappointment with the UK’s current Digital Services Tax, which remained unchanged with this current trade deal.   

Watch for Trump’s second state visit to Windsor Castle, which is out of the ordinary, considering no other US president has ever been invited out for a second state visit. This visit is expected to take place in September and could yield more trade agreements or even talks of free trade. While the US only has free trade with 20 countries through 14 agreements and Trump’s universal 10% tariff is still in place, there could be future talks of free trade.  

Global Challenges Impacting U.S. Agricultural Exports

A Changing Geopolitical Landscape is Proving Challenging to America’s Farmers

I had the great privilege of addressing the Iowa Soybean Association on January 29, 2024, in Des Moines, Iowa. America’s farmers are, in many ways, more keenly focused on - and deeply understanding of - geopolitical risk than just about any other profession. What happens in the Red Sea or in the Panama Canal has a direct impact on their product and delivery - and inflationary pressures here in the US, in significant parts of Asia, and in the EU (see map below):

Below is the full presentation that served, I am proud to say, as the groundwork for a lively and really fun discussion with the attendees. Thank you, Iowa Soybean Association, for having me. I really enjoyed it!

Wall Street’s Prudent Powerhouse

Wall Street both fascinates and repulses we Americans. The glowing power and the staggering flows of money, its ability to shape or destroy not only industry but entire countries. As a result – and depending on economic and social conditions – we have had a long episodic relationship with our financial titans, at times adulating them, at times seeing them as the fonts of all corruption and needing to be broken apart and controlled like dangerous animals.

We are vividly reminded of this odd and uneven relationship in Zachary Karabell’s richly absorbing and truly fascinating new book, “Inside Money: Brown Brothers Harriman and the American Way of Power . Using the long, storied history of Brown Brothers Harriman and its two antecedent firms, Brown Brothers and H.E. Harriman, we give both a grand and at times poignant tour of American finance and the massive role it has played in building our nation. Moreover, as a critical sub-theme of his book, we are shown that not all Wall Street investment houses of uncontrolled greed and fiscal imprudence. Case in point: Brown Brothers Harriman.

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Of the two firms, Brown Brothers is the oldest, tracing its history back to late 1700’s Ireland where we find Alexander Brown launching a successful business as a linen merchant. But Ireland was a troubled place then and, as a result of the Irish Rebellion of 1789, Brown was forced to flee the Emerald Island for Baltimore, Maryland with his wife and his youngest son (the three elder ones being in schools in England) to re-launch his firm. Baltimore was at that time the major trade port in the US, as southern states sent their goods north as well as Europe while in return being voracious consumers of fine Irish linen.

Brown was soon joined by other sons and within a few years had dispatched them to set up outposts in Philadelphia, New York, and Liverpool, England. As the years rolled by, Brown Brothers became a major – if not a dominant - financial force in the young United States and England, expanding beyond linen to corporate finance including sponsoring the first initial public offering in the US in 1808.

Yet – and here is that persistent sub-theme of the book - Alexander Brown did not let the business grow too fast. Prudence was the order of the day, every day for Alexander Brown. He demanded this of his sons in numerous letters preaching careful analysis of any new business proposition. Greed and ostentatious living were the greatest sin a Brown could commit, and, in its place, he demanded a strong sense of service to community and nation. As Karabell carefully documents, it seems Brown Brothers declined more opportunities than embraced which resulted in the firm not only surviving but thriving through numerous economic and financial crisis’ in the first half of the 1800s. These crises created the Progressive firebrands of the day, the biggest and most powerful being President Andrew Jackson who denounced the big financial firms as being a relic of “nobility systems that enabled a few and rich intelligent men to live upon the labor of many.”

It is not until the latter half of the 1800’s that we meet E.H. Harriman. Born in 1848 the son of an Episcopal pastor, Harriman was a slight, slender man who – to the horror of his father - abandoned schooling at the age of 14 to work as a runner for a New York brokerage. He was a keen learner and showed a genius for finance which, at the age of 34, he unleashed by making his first big acquisition: The Illinois Central Railroad. America was rapidly expanding West and the “iron horse” was the greatest and fastest way to make that expansion happen. Harriman’s acquisition instantly become a national railroad baron. (Interestingly and conversely, Brown Brothers took a hard pass on investing in railroads, believing it too speculative and not prudent). Despite that slight physique, Harriman proved to be an extraordinarily steely businessman. The author offers a fantastic look into how Harriman soon took on legendary financiers/railroad barons J.P. Morgan and Jacob Schiff (head of Kuhn, Loeb & Co., the forerunner of Lehman Brothers), beating them at their own game and bending them to his vision.

E.H. Harriman was now a major financial power, and it was not long before the two firms of Brown Brothers and H.E. Harriman were working in tandem on bond deals not only in the US but in Latin America and across Europe. But Harriman, like Alexander Brown, was a man also reliant on prudence to build out his business. Despite plunging into the go-go, boom-or-bust world of railroads at the time, it was his prudent, careful management of business that made him a success, and which ultimately won him the support of Morgan and Schiff. And, like Alexander Brown Harriman produced and carefully cultivated and trained heirs to join him at the firm and eventually succeed him: Averell and Roland.

Averell would, of course, go on to be Governor of New York and something of a legendary diplomat. He was the big idea guy, less so the day-to-day manager type. That was Roland’s forte. A prudent (there is that word again) and a strong manager who helped assemble a team of brilliant bankers who shared a nose for smart, careful yet financially rewarding deals.

The rise of Averell and Roland as leaders of H.E. Harriman in the 1920’s brought the most natural alignment with the men leading Brown Brothers. The bond was school, specifically Yale University where they all seemed to be members of the elite Skull & Bones Society or other elite societies and where their friendships for life were bonded and marriages even made them relatives (Alex. Brown in Baltimore along with the other affiliate set up in Liverpool nearly a century before, Brown Shipley, had effectively split off decades before due to US tax law changes).

It is here that Karabell demystifies – and also confirms – the clubby world of early 20th century Wall Street. Indeed, the belief in the US at that time that “…a small clique of elites pull[ed] the strings…usually centered on coastal elites that the Browns and Harriman’s epitomized” was strongly held by much of the country. In 1930, that opinion only grew as the boys from Yale were not only financing the biggest companies in America, quietly making big fees despite the stock market crash and resulting Great Depression but were now going to merge.

And where and how was the merger arranged? On a private train going from New York to New Haven, Connecticut to attend the Yale football homecoming game. Of course. Over fine scotch and good cigars, they worked out the details, smoothly bringing together the great financial houses into one. The result would have a much bigger impact on US and world history: The merger elevated a young Prescott Bush – father and grandfather to future US Presidents – as leader of the combined firms.

Today, the firm’s history and culture speak for itself. Yet, in today’s modern financial world, Brown Brothers Harriman stands as a stark anomaly to other firms. Too many on Wall Street, it is somehow seen as shrinking, fading business. But this is factually incorrect. It is still run as a partnership, having eschewed the big money the other large firms grabbed via listing themselves on the stock market. It is indeed a successful firm, and it is successful in the businesses it has chosen to pursue. Moreover, unlike virtually every other large investment bank and brokerage, Brown Brothers Harriman is never in the news, never engulfed in intense regulatory scandals that has hit every big-name financial house over the course of the last 30 years.

Karabell argues that over the years we seem to have quietly changed the definition of capitalism and what constitutes success in financial markets. “In what universe does surviving and thriving for over the course of more than two hundred years constitute failure? In what healthy system does never becoming too big to fail get judged negatively? Why is sustaining a culture that shuns the spotlight and remains both viable and modest not valued, while becoming a behemoth is celebrated and reviled? Why is Michael Milken a parable, while Brown Brothers a faint echo?... Over the centuries, they [Brown Brothers Harriman] made considerable money, and much of that money made America. For two hundred years, the firm stuck to its last.”

Karabell is spot on in his challenge, one all of today’s titans of Wall Street should pause to consider as we enter a rapidly changing and increasingly turbulent world.