US-UK Trade Relations, deals, and agreements 2023-24

The trade relationship between the United States and the United Kingdom is significant. As we look at 2023-24, it is essential to understand the current state of the US-UK trade, trade relations, the major deals on the table, and the potential for free trade agreements between these two economic powerhouses. Today, the UK and the US continue to be each other's largest trading partners, with billions of dollars in goods and services exchanged each year. US goods trade with the UK totaled $139.56 billion in 2023, with exports worth $74.08 billion and imports worth $65.48 billion. The US goods trade with the UK increased by 20% in 2023 from the previous year. In recent years, this relationship has been tested by various factors, including the uncertainties surrounding Brexit and the ongoing trade war between the US and China. Despite these challenges, both countries have expressed a strong desire to strengthen their trade ties and forge new agreements in the coming years.

Key Highlights of the US-UK Trade in 2023-24

• The US goods exports to the UK were valued at $74.08 billion in 2023.
• UK goods exports to the US were valued at $71.17 billion in 2023.
• UK’s exports to the US accounted for $16.72 billion in 2024 Q1, while US exports to the UK had a total value of $19.82 billion in the first quarter of 2024.
• Mineral fuels and mineral oils ($13.33 billion), precious stones and metals ($9.95 billion), aircraft, spacecraft, and parts thereof ($8.80 billion) are the top three US exports to the UK in 2023-24.
• Nuclear reactors and machinery ($15.13 billion), Vehicles ($8.62 billion), and pharmaceutical products ($8.02 billion) are the major UK exports to the US in 2023-24.
• US exports to the UK rose at an annualized pace of 10.2% over the last five years, from $66.45 billion in 2018 to $74.08 billion in 2023.
• In terms of overall exports ($1.95T), the US placed 2nd in 2023 and 10th in the Economic Complexity Index (ECI).
• In terms of overall exports ($469 billion) and the Economic Complexity Index (ECI), the UK came in at number 14 in 2023.

What are the top 10 US Exports to the UK?

The US exports a large proportion of goods to the UK for trade growth. Mineral fuels and mineral oils are the biggest US exports to the UK worth $13.33 billion in 2023. The major top 10 US exports to the UK in 2023 include:

1. Mineral fuels and mineral oils: $13.33 billion
2. Natural or cultured pearls, precious stones, and metals: $9.95 billion
3. Aircraft, spacecraft, and parts thereof: $8.80 billion
4. Nuclear reactors and machinery: $6.18 billion
5. Pharmaceutical products: $5.50 billion
6. Electrical machinery and equipment: $5.15 billion
7. Commodities not elsewhere specified: $3.39 billion
8. Works of art, collectors' pieces, and antiques: $2.86 billion
9. Optical, measuring, medical, or surgical instruments: $2.76 billion
10. Organic chemicals: $2.51 billion

What are the top 10 UK Exports to the US?

The UK’s exports to the US have been growing steadily in recent years. Nuclear reactors and machinery are the top UK export to the US worth $15.13 billion in 2023. The biggest UK exports to the US in 2023 include:

1. Nuclear reactors and machinery: $15.13 billion
2. Vehicles: $8.62 billion
3. Pharmaceutical products: $8.02 billion
4. Optical, measuring, medical, or surgical instruments: $5.03 billion
5. Organic chemicals: $4.94 billion
6. Natural or cultured pearls, precious stones, and metals: $4.44 billion
7. Electrical machinery and equipment: $4.28 billion
8. Aircraft, spacecraft, and parts thereof: $2.53 billion
9. Mineral fuels and mineral oils: $2.29 billion
10. Beverages, spirits, and vinegar: $1.90 billion

US-UK trade in the last ten years

What are the biggest US Export ports in FY23-24?

The biggest US ports in 2023 include:

1. Port of Los Angeles, California: 10.7 million TEUs
2. Port of Long Beach, California: 8.1 million TEUs
3. Port of New York and New Jersey, New York: 7.4 million TEUs
4. Port of Savannah, Georgia: 4.6 million TEUs
5. Port of Seattle and Tacoma, Washington: 3.74 million TEUs
6. Port Houston, Texas: 3.5 million TEUs
7. Port of Virginia, Virginia: 2.85 million TEUs
8. Port of Oakland, California: 2.4 million TEUs
9. South Carolina Ports, South Carolina: 1.9 million TEUs
10. Port Miami, Florida: 1.25 million TEUs

What are the biggest UK Export ports in FY23-24?

The Biggest UK trade ports in 2023 include:

1. Port of London: 119.3 million metric tons
2. Grimsby and Immingham port: 111.6 million metric tons
3. Milford Haven Port: 79.4 million metric tons
4. Port of Liverpool: 75.6 million metric tons
5. Port of Southampton: 66.2 million metric tons
6. Tees and Hartlepool port: 58.8 million metric tons
7. Port of Felixstowe: 49 million metric tons
8. Forth Ports: 44.9 million metric tons
9. Port of Dover: 43 million metric tons
10. Port of Belfast: 42.8 million metric tons

The Major UK-US Trade Deal in recent time

• A potential free trade agreement between the United States and the United Kingdom is known as the United Kingdom-United States Free Trade Agreement (UKUSFTA).
• Following a transition phase that continued till the UK formally quit the EU, on January 1, 2020, the UK gained the legal right to freely negotiate trade accords.
• Though negotiations began in May 2020, they have not moved forward since 2021 as a result of the Biden Administration's emphasis on stabilizing the country's economy.
• Both countries signaled their intent to negotiate a comprehensive agreement that would reduce tariffs, increase market access, and promote economic growth on both sides of the Atlantic.
• This deal could cover a wide range of sectors, including agriculture, technology, finance, and more. It has the potential to create thousands of jobs, boost GDP, and enhance the competitiveness of both nations in the global marketplace.

Recent US-UK Free Trade Agreements

In addition to a major trade deal, there is also talk of the US and the UK pursuing free trade agreements soon. These agreements would go beyond simply reducing tariffs and would aim to eliminate barriers to trade, such as regulatory restrictions and non-tariff barriers. By liberalizing trade in this way, both countries could enjoy even greater economic benefits, including increased exports, lower prices for consumers, and a more competitive business environment. An 'Atlantic Declaration' to fortify economic relations between the United States and the United Kingdom was unveiled by Biden and Sunak in June 2023.  A new data protection agreement, a restricted trade agreement covering essential minerals for electric vehicle batteries, and the removal of other trade obstacles were all included in the accord. A trade deal between the United States and the United Kingdom has substantial economic and strategic benefits. The US and the UK together can accomplish the following:

• Replicate this sound model with another major trading partner to maximize the benefits of the hard work Congress and USTR put into the USMCA for the U.S. economy.
• Enhance the bilateral regulatory environment generally between the US and the UK in several areas to cut costs and improve supply chain efficiency.
• Create cutting-edge digital laws that can be pushed internationally.
• For both nations' industries to be shielded from non-market economy practices, there needs to be an agreement on a free and open trade process to strengthen the economic ties between the US and the UK.

Conclusion

To conclude to this, US-UK trade relations have many possibilities and challenges. By seizing the moment and forging ambitious, formidable trade agreements, each international location can position itself for success in the global market and ensure a wealthy future for its citizens for 2024 and beyond. By focusing on the principal trade deals on the desk, pursuing free trade agreements, and working collaboratively to deal with key problems, the US and UK can build a more potent, greater resilient trade alliance that boosts their economies.

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