Welcome to the May BABN Policy and Trade Update.

The month of April has seen continued movement of the US trade environment and the progression of US-UK negotiations which hopes to reach a satisfactory deal, providing greater certainty to both economies. UK Chancellor of the Exchequer, Rachel Reeves headed to Washington DC for her first Spring Meetings of the International Monetary Fund (IMF) and to meet US Treasury Secretary Scott Bessent.

Trade and tariff discussions have remained the center-point of transatlantic policy as the US administration stalled the implementation of some higher-level tariffs for 90-days to negotiate a deal. Globally, around 75 countries are pursuing negotiations with the US on related matters; with 17 countries to be said among those with whom the US aim to secure a deal soon. The UK remains at the lowest level of 10%, and continued high-level UK and US government visits illustrate the desire for both sides to find a mutually beneficial arrangement.

See below for a breakdown of policy and trade headlines and our published works.

Chancellor Visit to Washington D.C.
23-25 April 2025

What happened: The Chancellor headed to DC for her first Spring Meetings at the IMF. During a 3-day visit to the US, the Chancellor held meetings with G7, G20, and IMF counterparts about the changing global economy. She made the case for open trade that provides stability for businesses.

The Chancellor also held discussions with her US counterpart Treasury Secretary Scott Bessent about working together to deepen the UK-US economic partnership through a new trade agreement.

Read more: You can read our full submission here.

UK-US Trade Deal
8 May 2025

What happened: The US and UK announced an agreement to ease some of the recently imposed tariffs on UK exports to the US, and to increase market access for certain food and agricultural products. There was also discussion about a future digital economy agreement in the works.

How BAB responded: We must be clear that this agreement still means that UK exporters to the US face higher costs than before April 2nd as the general 10% ‘reciprocal’ tariffs remain in place. The agreement provides a foundation, but not a finish line for US-UK trading conditions.

Read more: You can read our full statement here.

Tariff Update
April 2025

Latest tariff developments: here is a breakdown of the latest developments on US tariffs, accurate as of May 7th.

Tariffs currently in force
• China: Tariffs on Chinese imports have escalated significantly. Originally set at 20%, they now total 145% following a series of increases announced in April 2025.
• Steel, Aluminium, Autos: Section 232 tariffs remain unchanged, continuing to apply to a broad range of imports. They are currently at 25% for steel, 10% for aluminium, and 25% for autos and auto parts.
• However this week, Trump announced that autos and auto parts subject to his new 25% Section 232 autos tariffs will no longer be also subject to other 25% tariffs that he has imposed on steel and aluminium or on Canadian and Mexican goods related to the U.S. fentanyl crisis.
• Venezuelan Oil: Tariffs remain in place at 35%.
• Fentanyl-related Products: Imports from non-USMCA countries face a 25% tariff, while Canada and Mexico remain exempt under USMCA.
• 10% baseline tariff: A new 10% “universal” tariff on almost all imports from all countries (in addition to MFN rates).
• Products that are subject to 232 tariffs, such as steel and aluminium, and autos and auto parts, or to be planned 232 tariffs, such as pharmaceuticals and semiconductors, are *exempt* from the additional reciprocal/universal baseline tariffs.
• For products that include US content, the US content is exempt from the new tariffs, as long as the US content is at least 20% of the value of the imported product. E.g. a Korean car that includes a 30% US content will only be tariffed at 70% of the import price.

Tariffs paused or delayed
• While the baseline 10% tariff introduced on April 5th for several trading partners (excluding Canada and Mexico) remains in effect, the additional “discounted reciprocal rate” that Trump had announced for 60 named countries has been delayed for 90 days. The pause is set to expire in early July, pending the outcome of ongoing trade negotiations.
• Electronics Exemption: As of April 11, 2025, smartphones, computers, semiconductors, and other key electronics are exempt from new tariffs.

Tariffs under investigation
• IEEPA & Section 232 Reviews: The administration is actively reviewing additional tariff measures under the International Emergency Economic Powers Act (IEEPA) and Section 232, targeting sectors such as automotive, pharmaceuticals, and rare earths.

Want more information?: On April 10th, BAB held a trade and tariff briefing to outline the latest developments on US-UK trade. The discussion was held prior to the roll back of reciprocal tariffs with China, and 90-day period that was implemented for countries to hold negotiations. You can find the readout here.

Continue reading BAB Policy and Trade Update, May 2025 HERE