US-UK Trade Deal: Northern Ireland

Lindsay Hoyle Excerpts

Monday 12th May 2025 Commons Chamber

[Mr Speaker]

Order. I gently say that answers to urgent questions are only meant to last for three minutes. I can see that you have quite a few more pages; I am happy to take them because I think it is important that the House knows about the deal, but we need to understand what we have granted and what we have not granted. I do not want to go back over the events of Thursday, when nobody seemed to understand the procedure of the House, and I recognise how important this issue is to hon. Members but, seriously, we should know the rules and I just wonder how this has gone wrong again.

[Jonathan Reynolds]

Mr Speaker, I am incredibly grateful for your forbearance. If it is okay, I will continue to these words, given how important I know the matter is to all Members of the House.

[Mr Speaker]

Order. If it is so very important, why was it not presented to the House as a statement or converted? That is what I would say. I never quite understand—the other day, we could not convert them quickly enough, but today we do not want to.

[Jonathan Reynolds]

Mr Speaker, I would have been more than happy to make it a statement, and I was hoping to be able to do so.

We have negotiated a quota of 100,000 vehicles where tariffs will be reduced from 27.5% to 10%, and secured an agreement for associated car parts, recognising the vital role that this sector plays in our economy.

For steel and aluminium, this deal will remove the 25% additional tariffs that were put in place earlier this year, reducing US tariffs on core steel products to zero. This will provide a critical lift for the steel industry, which has been brought back from the brink of collapse, allowing UK steelmakers to continue exporting to the US. This follows our intervention last month to take control of British Steel and save thousands of jobs in Scunthorpe.

For pharmaceuticals and life sciences, this deal provides assurances that we will receive significantly preferential access in case of any new US tariffs, something that, so far, only the UK has secured. As the pharmaceutical manufacturing sector contributes £20 billion to the UK economy a year and employs around 50,000 people, this was a priority for us.

On aerospace, we agreed that UK aerospace exports, such as Rolls-Royce engines and plane parts, will have a specific guarantee of zero tariffs as a result of this deal. This will be a huge boost to the sector, which supports 450,000 jobs in the UK.

To secure this deal, we have made agreements with the US on beef, ethanol and economic security. On beef, we have agreed a new quota of 13,000 metric tonnes, and have reduced the UK tariff on existing US imports coming through a World Trade Organisation quota limited to 1,000 metric tonnes. Crucially, I can confirm this will comply with sanitary and phytosanitary standards, in accordance with the commitments that we have always made.

The increase in the quota of 13,000 tonnes compares with the 110,000 tonnes in the Australia deal negotiated by the last Conservative Government. Even more importantly, the deal is reciprocal, meaning our UK beef farmers will have unprecedented market access to the US. Our farmers will be able to export their high-quality beef through an exclusive UK quota to a market of over 300 million people, providing unparalleled access to the world’s largest consumer market.

On ethanol, we already import a significant amount of ethanol from the US and have agreed a duty-free quota capped at 1.4 billion litres. We are working closely with our domestic sector to understand its concerns and any potential impacts to businesses, including what more Government can do to support the sector.

Finally, the UK and US will strengthen our co-operation on economic security and work together to combat duty evasion. We will continue to use investment screening measures already in place, and we will work together to protect our existing supply chains from any third-country investment that concerns either one of us. This Government will take a consistent, long-term and pragmatic approach to managing the UK’s relationships with third countries, rooted in our UK and global interests.

As we have made clear, the aspiration on both sides is that this is just the beginning, with the US agreeing to deepen transatlantic trade and investment further, and to progress discussions towards a transformative UK-US technology partnership. This deal has seen jobs saved and jobs won, but it is by no means job done. The siren voices of the extremes can claim to be the voice of working people all they want, but we know that on matters of action on wages, security and opportunity, it is this Government who will make the difference.

The deal comes on the back of our India trade deal earlier last week and on the promises that many Governments have made to secure trade agreements with the US. Although many people have talked about those deals, it is this Government that have got them across the line for every bit of the UK, including Northern Ireland.

[Jim Allister]

For all his verbosity, the Secretary of State came nowhere close to addressing the issues that arise from the fact that this Government and this House do not control the trade laws of a part of this United Kingdom—namely, Northern Ireland. Under the Windsor framework, Northern Ireland was placed under the EU’s customs code, so it is therefore its tariffs, not the UK’s tariffs, that govern the imports to Northern Ireland. With the EU having no trade deal with the US or India, the resulting tariffs on imports under this deal will be higher when the goods come to Northern Ireland than when they come to GB. For manufacturing and consumers, that creates huge disadvantage and fundamentally contradicts the equal citizenship that is supposed to denote a United Kingdom.

The Secretary of State referred to the convoluted and tardy system of possible recoupment of tariffs, but the onus there is on those applying to prove that anything they produce will never go into the EU. It is no answer to Northern Ireland’s subjection to foreign trade laws, which we do not make and cannot change. The Secretary of State would not contemplate that for his own constituents, but he expects us to sup it up in Northern Ireland.

I will ask the Secretary of State about three specific issues. Under the deal, will it not be easier for US manufacturers to buy tariff-free steel from Great Britain than for manufacturers in Northern Ireland to buy the same steel from their own country to bring it into their own country? That steel will be subject to EU tariffs. How can that ever be compatible with Northern Ireland supposedly being part of the EU’s internal market? In terms of beef and the tariff-free trade within the quota that has been set, how can—

[Mr Speaker]

Order. I am sure that the hon. and learned Member must be coming to an end. Just because the Secretary of State has taken advantage of the Chamber, I certainly do not expect every other Member to do so—Front Benchers, yes, but the hon. and learned Member will know that he is limited to two minutes.

[Jim Allister]

Where there is a set quota for imports of beef, how can Northern Ireland participate in that if the UK cannot offer a reduced tariff rate in Northern Ireland? Does that mean that our beef-exporting farmers in Northern Ireland will be excluded? Surely all these trade deals expose the folly of surrendering part of our territory to foreign customs control.

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[Jonathan Reynolds]

Absolutely. Whenever any trade agreement of any sort is agreed, there will obviously be domestic impacts if our trading partners have requested further access to the UK market. That is particularly the case for the agreement on bioethanol. Senior officials from my Department have been meeting representatives of the domestic industry, and I have a personal meeting set up—on Wednesday of this week, I believe. A lot of the issues we need to address are wider than what has been agreed through this trade agreement, but our commitment to working with the domestic industry to help manage any trade-based transitions is absolute.

[Mr Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

I congratulate the hon. and learned Member for North Antrim (Jim Allister) on securing this urgent question, although I agree that the Government really should have offered a statement to the House on this important subject.

Of course, the House has still not yet seen the full detail of the trade agreement with the United States of America. The Secretary of State says that this is just the beginning, but there are still a great many unanswered questions about what we have so far, including what are clearly ongoing negotiations on pharmaceuticals. In his answer, the Secretary of State said that the UK will have significantly preferential rates, but what does that mean in practice? Where is the detail about what “significantly preferential rates” actually means? There are similar questions about the digital services tax.

Last week, the shadow Secretary of State for Business and Trade, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), asked the Trade Minister a straight question: whether this trade agreement would

“protect the special status of Northern Ireland”.—[Official Report, 8 May 2025; Vol. 766, c. 899.]

The Minister was unable to provide an answer at the time, and I remain unconvinced by what the Secretary of State has had to say today—there is still a lot of talk about the risks of goods entering the European Union. Clearly, this is a far more complex situation than the Secretary of State would like us to accept. As the hon. and learned Member for North Antrim made clear, the EU is still hugely influential in Northern Ireland trade law. The points he made about steel, for example, were accurate and deserve clear answers.

It is clear that this deal will have a number of implications for the functioning of the dual customs regime, yet businesses in Northern Ireland have been left in the dark for too long by the lack of detail in last week’s announcement. I would therefore be grateful if the Secretary of State would confirm what discussions he has had with his US and EU counterparts about rules of origin and the green lane in Northern Ireland. What specific measures are the Government implementing to ensure that Northern Ireland businesses are not disproportionately burdened by increased costs and administrative complexities as a result of this trade agreement? Finally, given that the Prime Minister is gearing up for his surrender summit with the European Union next week, can the Secretary of State confirm that there will be no backsliding on Northern Ireland’s place as an integral, absolute and total part of our United Kingdom?

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[Jonathan Reynolds]

Last week was a good week all told, on footballing and trade matters. You may be noting, Mr Speaker, that my voice is a little hoarse as a result.

We on the Government Benches were elected on our manifesto commitment not to alter our sanitary and phytosanitary regime and our food standards. Some people said that a deal with the United States would not be possible if we stuck to that, but we did, and we have an agreement. That proves everything we said about why that issue is so important to us.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Clive Jones (Wokingham) (LD)]

Please bear with me, Mr Speaker, because I think that I too am losing my voice.

Parliament must be given a vote on the United States trade deal and all future trade deals, which must be properly scrutinised by Parliament. Let me remind the Secretary of State that Labour party policy was to have a vote in Parliament on trade deals. What a massive U-turn has taken place over the past few months. Trump’s trade war threatens jobs across the United Kingdom and especially in Northern Ireland, where there is heightened uncertainty because of the Tories’ botched Brexit deal. What is the Secretary of State’s assessment of the impacts of Trump’s trade war on our small businesses and our living standards, and what will he do to address those impacts?

In Wokingham, where I live, Shinfield Studios employs hundreds locally. We are the Hollywood of the UK. What steps are the Government taking to protect the UK film industry from potential tariffs, and thus to protect jobs in Wokingham and in other parts of the UK, including Northern Ireland?