The freshly inked US-UK trade pact may have triggered diplomatic handshakes, but European Union trade ministers aren’t impressed. In Brussels on Thursday, they made it clear: the limited nature of the agreement, particularly its retention of US tariffs on British exports, won’t be sufficient to prevent looming EU countermeasures.
Announced last week by US President Donald Trump and UK Prime Minister Keir Starmer, the bilateral trade deal trims tariffs on aluminium, steel and cars but keeps in place a 10 per cent levy on most UK exports. While it’s being touted as a step forward, European Union (EU) views it as a half-measure at best.
Polish Deputy Economy Minister Michal Baronowski, representing the EU’s rotating presidency, acknowledged the truce with China and the UK deal as signs of a possible de-escalation. However, he warned against premature optimism.
“The bloc should not jump too fast,” Baronowski said, noting similar caution from global partners like Japan. “I don’t think that’s the level of ambition that Europe would be happy with. I think we can have a better deal than staying with pretty high tariffs... I would hope that (the EU gets) a better deal than any other deals the US is now negotiating.”
Sweden’s Trade Minister Benjamin Dousa minced no words. “If the UK-US deal is what Europe gets, then the US can expect countermeasures from our side,” Dousa said. “I would barely call it a trade deal at all.”
At present, the EU faces a 25 per cent tariff on its exports of steel, aluminium and cars to the US, plus a 10 per cent “reciprocal” tariff on nearly all other goods, potentially climbing to 20 per cent if negotiations don’t progress before the July 8 deadline.
French Trade Minister Laurent Saint-Martin and Finland’s Ville Tavio both dismissed the current structure of reciprocal tariffs as unacceptable.
“No, that’s not what I would be hoping for... and you have to keep in mind that actually the 10 per cent tariff wouldn’t be beneficial for the US economy either,” Tavio said.
While the European Commission has prepared a retaliatory tariff list targeting EUR 95 billion (approx. USD 106 billion) worth of US goods, EU officials insist a negotiated resolution remains the priority. European Trade Commissioner Maros Sefcovic confirmed he spoke with US Commerce Secretary Howard Lutnick this week, with both sides agreeing to step up engagement.
Meanwhile, economic analysts are questioning the long-term viability of the US-UK agreement. UK exports to the EU still outpace those to the US by a factor of three. Also, according to recent forecasts, aligning British regulations with EU standards could boost UK exports by 2.2-3.3 per cent and raise GDP by as much as 2 per cent.
Strategically, much also rides on whether London and Brussels can chart a fresh course. Five years post-Brexit, UK-EU trade remains disproportionately large, wherein the UK’s trade with the EU still outstrips that with the US by a factor of six.
With a formal review of the Brexit trade deal set to begin in 2025 and stretch into 2026, starting with a summit next Monday in London, the conversation is shifting. On both sides, what’s emerging is a recognition that deeper UK-EU integration may be economically inevitable.
Simultaneously, China has issued a stark warning to the United Kingdom over its newly signed trade agreement with the United States, accusing London of drifting into a Washington-led economic alignment that could force British firms to marginalise Chinese products from their supply networks.
The pact, announced last week, offers the UK only modest relief from longstanding US tariffs, most notably on car and steel exports. But the fine print reveals a deeper strategic pivot. Under the deal’s security conditions, UK companies will be required to scrutinise ownership structures and cleanse their supply chains of components linked to high-risk jurisdictions, a veiled reference to China.
Beijing has taken a firm stance against the move, arguing that the bilateral agreement breaches an essential tenet of international diplomacy, namely, that no third country should be adversely affected by trade arrangements to which it is not a party.
In a statement to the Financial Times, China’s foreign ministry criticised the terms of the agreement, stating, “Cooperation between states should not be conducted against or to the detriment of the interests of third parties.”
This clause of contention—the supply chain compliance requirement, has been interpreted by analysts as an indirect mechanism to sideline Chinese materials, particularly in sectors like semiconductors, critical minerals, and next-gen automotive components.
While the UK has framed the deal as a step toward economic resilience and deeper transatlantic cooperation, critics argue it places Britain in a geopolitical crossfire. The agreement may open limited tariff doors, but it potentially closes others, with China now signalling the possibility of retaliatory policy measures.
In Beijing’s view, the deal goes beyond economics, creeping into the terrain of strategic exclusion. With tensions already simmering over issues ranging from chip exports to rare earth access, this development could add another layer of complexity to UK-China trade dynamics, even as London attempts to rewire global supply chains in line with Western security interests.
As the UK navigates its post-Brexit trade identity, the broader question looms — at what cost does alignment with the US come, and can Britain afford the fallout of antagonising the world’s second-largest economy?
