UK aligns with U.S.
in security-driven global trade shift

The American-British trade relationship, once framed primarily by economic liberalism, is emerging into a nexus of investment, trade and technology security amid strategic alignments in the face of rising global tensions.

For the United Kingdom, whose economy is still adjusting to the post-Brexit and post-pandemic environment, the goals of the United States-UK Economic Prosperity Deal (EPD) complicate that adjustment phase by transcending traditional tariff and quota concerns to encompass geopolitical issues.

For Washington, this deal highlights its preference for bilateral agreements, with the U.S. wielding most of the bargaining power. This includes imposing its objectives of marginalizing global rivals, particularly China, from other world economies. The strategic innovation is clear; rather than relying on a singular, comprehensive trade deal akin to the Trans-Pacific Partnership (TPP) − which the first Trump administration had rejected − the U.S. appears to be experimenting with smaller, modular agreements focused on specific strategic goals.

The EPD could serve as the model for a broader economic security architecture involving countries willing to maintain strong political, economic and defense relations with the U.S., at the expense of others.

The UK bends to U.S. interests: Economic security over free trade

The terms of the EPD’s security arrangements, broadly referred to as “shared national security priorities” and “security of the supply chains,” are undefined and subject to ongoing detailed talks. Their invocation in the deal suggests an orientation toward trade policy being determined largely by defense and security concerns.

As a result, the EPD incorporates bilateral economic interests and a broader alignment of geopolitical strategies, albeit more in line with U.S. geostrategic interests, such as securing international supply chains, controlling critical technologies and reducing dependencies on competitors. This is particularly evident in the agreement’s national security provisions, which require strengthening “cooperation on economic security,” despite Washington not yet employing a specifically defined economic security strategy.

Even so, the terms point toward an intention to coordinate efforts “to address non-market policies of third countries.” One can plausibly assume that the wording of this provision is principally aimed at Beijing, which is often charged by U.S. administrations for engaging in non-market economic policies.

Washington’s essentially self-serving stance and London’s acceptance of these measures highlight the sharp reversal of UK trade policy.

London appears to have surrendered the sovereignty it had supposedly gained after Brexit, by towing the line with Washington’s national interests.

 

After its departure from the European Union in January 2020, the UK prioritized forging independent relations with countries around the world as part of a “Global Britain” policy. Now, London appears to have surrendered the sovereignty it had supposedly gained after Brexit, by towing the line with Washington’s national interests.

In particular, the EPD’s provisions on economic security stand in contrast to UK Prime Minister Sir Keir Starmer’s reset in UK-China relations shortly after his election in 2024. At that time, his diplomacy with Beijing represented a strategic shift towards engagement and cooperation – a departure from previous UK governments’ frosty relations with Beijing. Prime Minister Starmer looked to attract Chinese inward investment and imports of consumer goods in return for exports of UK financial services to China’s economy.

Furthermore, the EPD requires that in securing access to their respective government procurement markets, the UK should apply new national security powers. These measures would ensure that non-treaty nations, such as China, do not automatically receive non-discriminatory treatment when bidding for government projects in the UK.

Such a measure, if implemented, may not be supportive of China in its current negotiations toward becoming a full member of the World Trade Organization’s (WTO) Government Procurement Agreement program.

Limited upside of the U.S.-UK deal

Although the UK has conceded much of its sovereignty in favor of aligning with U.S. geopolitical interests, London has arguably not gained much in terms of trade benefits from the deal. In fact, the EPD’s conditions may well leave the UK worse off than it was prior to President Trump’s “Liberation Day” tariffs on April 2, with few tangible benefits in sight.

One of the key issues is that the EPD’s trade provisions run counter to the principles of the WTO. This may be primarily attributed to the preservation of Mr. Trump’s 10 percent across-the-board tariff. The U.S.’s offer of a new 10 percent baseline and its acceptance by the UK may indicate that this is becoming America’s new de facto Most Favored Nation (MFN) rate.

This may have important implications since over 80 percent of global trade occurs under MFN conditions. Any acceptance of unilateral provisions, such as those under the EPD, could lay the groundwork for other U.S. trade deals to follow suit.

The various tariff concessions which the UK received under the EPD, including removal of 25 percent levies on British steel and aluminum exports to the U.S., which originally applied on Liberation Day, are, however, not legally binding.

Furthermore, while a quota on steel and aluminum will be negotiated, no specific figures were mentioned. The UK would also be required to meet a tracking standard to measure the content of those products, which is unspecified.

The agreement also leaves room to negotiate down duties on U.S. section 232 trade investigations that have not yet concluded, which includes pharmaceuticals. This means an onerous and uncertain outcome for the UK, as it will need to negotiate a new deal on each and every one of the section 232 investigations opened by the White House.

Although the UK received a reprieve on vehicle tariffs, it is worse off than where it started in 2025. Under the EPD’s new quota system, the first 100,000 UK-made vehicles imported into the U.S. would fall under the baseline 10 percent tariff, and any excess would be subject to a 25 percent levy. Since this amount is roughly equivalent to UK annual vehicle exports, the imposition of the higher rate may still result in an export decline.

Aside from the negative implications for the UK, the EPD does not augur well for other countries in their efforts to conclude favorable trade deals with the U.S. in the future.

Is the UK shifting away from traditional trade agreements?

The new U.S.-UK deal symbolizes a move away from traditional free trade agreements (FTAs) in favor of strategic partnerships that emphasize non-trade agendas, including economic security concerns.

In this light, the UK is engaging in realpolitik. As a middle-power no longer participating in a major regional economic bloc, London has little choice but to employ a double-edged trade strategy; one involving greater security alignment with the U.S., and another seeking improved trade with other major economies.

This includes the UK agreeing to an FTA with India only days prior to concluding the EPD. To this end, the UK-India FTA is a more traditional trade and economic arrangement, and certainly more connected with a post-Brexit independent trade policy.

Around the same time, the UK also reached agreements on several key issues with the EU, commonly referred to as a “Brexit reset,” which may be something of a middle ground. The negotiations with Brussels not only involved greater harmonization and cooperation over specific mutual economic and political interests, but also established a new Security and Defense Partnership. While this arrangement involves an element of sovereignty pooling with the EU, it potentially gives the UK access to the bloc’s upcoming large-scale defense procurement programs.

Export controls and strategic technologies

The EPD includes provisions – or at least political intent – toward harmonizing export controls on sensitive technologies like semiconductors, artificial intelligence, quantum computing and biotechnology.

The UK has already aligned its export controls regime with the U.S. International Traffic in Arms Regulations and Export Administration Regulations in several critical areas. Deeper harmonization through the EPD would cement this cooperation and simplify compliance for transatlantic firms.

The trade deal could thereby serve to institutionalize closer cooperation on export controls, ensuring that neither country’s companies inadvertently supply critical technologies to geopolitical rivals. This U.S.-UK alignment could lead to a broader network of export control regimes among like-minded countries, such as the G7 and the Quad nations.

Moreover, the agreement could include provisions to prevent Chinese firms from using the UK as a backdoor to circumvent U.S. sanctions. Since China’s Huawei was initially permitted to develop the UK’s 5G networks before being banned under U.S. pressure, the agreement’s subsequent negotiations might formalize stricter coordination on such decisions, reinforcing a unified U.S.-UK stance against perceived security threats from other Chinese technology companies.