Bulletin: A US-UK food trade deal?

US-UK food trade deal?

In a meeting with the Prime Minister, the US President announced the start of talks on a "new economic deal," expressing optimism about a "great deal" without the need for tariffs. The Prime Minister emphasised that any trade agreement would prioritise artificial intelligence and advanced technologies, with no mention of food trade.

Meanwhile, the US President revealed plans to impose 25% tariffs on the EU "very soon," with further details expected.

For more insights, check out our article on US tariff policy impacts on the UK food system.

See our IGD Opinion to understand what this means in terms of prospects of a trade deal involving food.

IGD Opinion

The US President’s statements regarding the UK were noticeably more positive compared to his statements about the EU, which faces renewed tariff threats.

Although the US and UK have engaged in sporadic trade talks over the years, progress has been minimal recently.

A good relationship between the leaders might help to move things forward, but trade deals typically take years to complete, so any benefits are likely far off, even if talks go well.

Free trade generally brings economic benefits, and a new deal could be advantageous for both nations.

A technology-focused deal might help counter emerging competition from China. However, for UK agri-food businesses, the situation is more complex. The UK currently imports little food and drink from the US due to factors like geography, established trade channels with the EU, and differing production standards.

A major concern is that US negotiators may push for better access to the UK market for US food products (e.g. beef), which may not always meet the same standard as UK equivalents.

Energy bills increase

Ofgem has announced that from April to June 2025, domestic energy prices will be capped at £1,849 per year for an average household paying by Direct Debit for dual fuel.

This is an increase of 6.4% versus January to March 2025.

Ofgem states that the main reason for the increase is a change in wholesale energy prices, accounting for about three-quarters of the change.

The other quarter came from regulatory compliance costs and other inflationary factors.

IGD Opinion

The Energy Price Cap refers to price-per-unit of energy, not bills paid by consumers – bills vary depending on tariff, weather, housing type and lifestyle.

Household energy usage varies so widely that the idea of a “typical” or “average” household is not very useful.

However, for an “average” household, buying both fuels by Direct Debit, a 6.4% increase in energy bills would be an increase of £111 per year to £1,849.

Household bills for Council Tax and water will also increase in April.

Changes to employment costs in April will likely also cause many businesses to raise their prices.

It is therefore likely to expect a “pulse” of inflation in April, although some households may benefit from higher wages and pensions at the same time.

Climate change action

The Climate Change Committee (CCC) has reported that emissions must be cut by 87% by 2040 (compared to 1990 levels). If this is achieved, the CCC predicts annual household energy bills will be £700 cheaper than today.

As part of its findings, it recommends:

• A reduction in livestock numbers with the number of cattle and sheep to fall by 27% from 2023 levels, most notable to free up land to plant trees

• A reduction in the amount of meat in diets by 25% by 2040

Farming initiatives

The Environment Secretary announced the following initiatives to help British farmers at the NFU conference:

• A new farming profitability unit to be set up within Defra

• Extending Seasonal Workers visas for five years, and a reduction in the number of seasonal workers in the future

• All applications for capital grants will be taken forward

• Investment of £30 million to increase payment rates in Higher Level Stewardship

NEET increase

The ONS has announced a 12.5% increase in the number of young people aged 16-24 not in education, employment or training (NEET) in October to December 2024 (compared to October to December 2023).

The Mmmake Your Mark campaign unites the UK's food and drink industry to showcase why it’s such a vibrant place to work. Download the toolkit and get involved.

Northern Ireland Retail Movement Scheme

Defra has published updated guidance on products in scope for Phase 3 of the Northern Ireland Retail Movement Scheme and commodity codes for products exempt from individual labelling.

Businesses will be able to join webinars in March.