U.S. – U.K. Trade Agreement

U.S. – U.K. Trade Agreement

U.S. Trade Representative – U.S.-UK Trade Negotiations and Working Group meetings


The United Kingdom is the fifth largest economy in the world, with the U.S. being the first. The U.S. maintains a deep trade and investment relationship with the U.K. The UK officially left the European Union on January 31, 2020, the two countries are now able to enter into formal FTA negotiations. Trade negotiations are expected to begin this year.

UK – US Free Trade Agreement
UK Department of International Trade, February 2020

United States-United Kingdom Negotiations: Summary of Specific Negotiating Objectives
U.S. Trade Representative, February 2019

Trump Administration Announces Intent to Negotiate Trade Agreements with Japan, the European Union and the United Kingdom
USTR, October 16, 2018


Two-way trade between the United States and the United Kingdom was $132.33 billion in 2019 and was the fifth largest importer of US goods with a total value of $69.15 billion. Top exports to the UK were transportation equipment, making up 19%, followed by primary metal manufacturing, chemicals, and coil and gas. The U.S. imported $63.18 billion from the UK in 2019. Transportation equipment accounted for 226.9% of the total, followed by chemicals, non-electrical machinery, and reimports. (U.S. Department of Commerce)

The United Kingdom is California’s 12th largest export destination, with over $5.2 billion in exports. Computer and electronic products accounted for approximately 25% of exports – more than $1.3 billion.  Transportation equipment brought in $797 million, or 15.1%; while both second-hand merchandise and chemicals accounted for 11% and 8.6%, respectively.

In 2019, imports into California from the United Kingdom were approximately $6.16 billion, with the top categories being transportation equipment, which made up almost 50% of the total, followed by computer/electronic products, used or secondhand merchandise, and reimports.

Per the US Department of Commerce, the U.S.-UK investment relationship is the largest in the world, valued at over $1 trillion in 2016 and creating over two million jobs, about one million in each country.

Over 42,000 U.S. firms export to the UK. Annual U.S. exports to the UK are valued at more than $100 billion.

British investment is key in the US. Over a million Americans go to work every day for British companies. Similarly, one million Brits go to work for America companies every day. British investment is specifically vast in California where it supports approximately 105,000 jobs in our state and UK subsidiaries in California total over 1,000. (British Consulate General – SF, 2012). The UK contributes 19% of the FDI into California, more than double any other country.

UK FDI in the US contributed $7.9 billion to research and development and an additional $43.1 billion to expanding US exports. The top industry sectors for British FDI in the US are: business services, software and IT services, financial services, communications, industrial machinery, and textiles. (Select USA)

Previous Activity

In July of 2017, U.S. Trade Representative Robert Lighthizer and UK Secretary of State for International Trade Dr. Liam Fox, formed the U.S.-UK Trade and Investment Working Group which is focused on providing commercial continuity for U.S. and UK businesses, workers, and consumers as the UK leaves the European Union. The working group has laid the groundwork for future FTA negotiations as it has explored ways the two countries can collaborate to promote open markets and freer and fairer trade around the world.

The working group met has met six times as of 2020 and a more recently created U.S.-UK Small and Medium-sized Enterprises (SME) Dialogue met three times.

Anticipated Action

The CalChamber is hopeful that the U.S. and UK will begin FTA negations as soon now that the UK has formally exited the European Union. The CalChamber supports the goal of strengthening the trading and investment relationship between the two countries, with a focus on securing open market access. The CalChamber supports the following issues being discussed during negotiations:

  • market access for goods;
  • data protection and data transfers;
  • financial services;
  • intellectual property rights;
  • movement of labor; and
  • regulatory cooperation.

CalChamber Position

The California Chamber of Commerce, in keeping with long-standing policy, enthusiastically supports free trade worldwide, expansion of international trade and investment, fair and equitable market access for California products abroad and elimination of disincentives that impede the international competitiveness of California business.

Strengthening economic ties and enhancing regulatory cooperation through agreements with our top trading partners that include both goods and services, including financial services, is essential to eliminating unnecessary regulatory divergences that may act as a drag on economic growth and job creation.

Agreements like this have the capability of ensuring that the United States may continue to gain access to world markets, which will result in an improved economy and additional employment of Americans.


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