The US-UK trade agreement sparks a sovereignty dispute: The US gains veto power on Chinese investments, and the film and television industries face tariff threats.

Taiwan • Politics • 05/09 02:00
The US-UK trade agreement sparks a sovereignty dispute: The US gains veto power on Chinese investments, and the film and television industries face tariff threats.

On May 9, 2025, UK Prime Minister Skel and US President Trump announced the UK-US trade agreement. The agreement provides tariff reductions for the UK's automotive and steel industries, but grants the US the right to review significant Chinese investments in the UK, raising concerns about UK sovereignty. The film and television industry was excluded from the agreement and is facing the threat of high tariffs from the US. As a result, the Skel government is facing criticism and pressure from domestic political and industrial circles.

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The US-UK trade agreement sparks a sovereignty dispute: The US gains veto power on Chinese investments, and the film and television industries face tariff threats.

On May 9, 2025, UK Prime Minister Skel and US President Trump announced the UK-US trade agreement. The agreement provides tariff reductions for the UK's automotive and steel industries, but grants the US the right to review significant Chinese investments in the UK, raising concerns about UK sovereignty. The film and television industry was excluded from the agreement and is facing the threat of high tariffs from the US. As a result, the Skel government is facing criticism and pressure from domestic political and industrial circles.

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Thaw in US-China Trade War: Ahead of Geneva Talks, Trump Stands Firm on Maintaining Tariffs, Video Translation Error Leads to Misunderstanding

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US Gains Review Power Over Chinese Investments, Sparking Sovereignty Controversy

According to The Daily Telegraph, as part of the agreement, the UK government has agreed to cooperate with the US on "investment security measures," allowing the US to raise objections to significant Chinese investments in the UK. Although a UK government spokesperson emphasized that the US does not have a "formal veto power," multiple media outlets and opposition figures have pointed out that this essentially gives the US a say in the UK's investment policy towards China.

A source close to the negotiations told The Telegraph that this arrangement is a "clause highly valued by the US," describing it as "a form of veto power." The Conservative Party criticized this move as severely damaging the UK's sovereignty and strategic autonomy, arguing that the Sunak government conceded too much in the negotiations.

The UK government stated that this arrangement is based on cooperation under the framework of the National Security and Investment Act, not outsourcing review power to the US, but allowing the US to "flag" potential risky investment cases, with the final decision still resting with the UK Cabinet.

Tariff Reductions Focus on Cars and Steel, But Most Goods Still Subject to 10% Tariff

One of the most notable outcomes of the agreement is the US's agreement to reduce tariffs on UK car exports to the US from 27.5% to 10%, applicable to up to 100,000 cars annually. Tariffs on steel and aluminum products will be reduced from 25% to zero, providing an immediate export boost for the UK's heavy industry.

However, the agreement does not fully eliminate the 10% general tariff imposed by the Trump administration on "Liberation Day," April 2, 2025. Most UK goods will still be subject to this basic rate. According to reports from the Financial Times and the BBC, economists estimate that these tariffs will result in a loss of approximately £9.5 billion in UK exports, contributing only 0.1% to GDP.

In exchange, the UK agreed to remove import tariffs on US beef and ethanol, creating about $5 billion in export opportunities for US agriculture. Nonetheless, the UK government emphasized that it will continue to ban the import of hormone-treated US beef to maintain food safety standards consistent with the EU.

Film and TV Industry Not Included in Agreement, Faces Potential High US Tariffs

Although the agreement covers cars, steel, agriculture, and some manufacturing, the film and TV industry was not included in the formal terms. US President Trump has clearly stated plans to impose tariffs of up to 100% on foreign films, claiming the move aims to "bring production back to the US."

UK Culture Secretary Chris Bryant stated in Parliament that the government is engaged in "active discussions" with senior US officials, hoping to reach "suitable trade deals" for the film and TV industry to mitigate potential tariff impacts. He revealed that talks have already begun with major film and TV companies like Warner Bros.

According to Deadline, US film and TV companies invested nearly $1.9 billion in the UK in 2024, accounting for 64% of the UK's total film and TV industry output. If the US imposes high tariffs, it would pose a significant threat to Hollywood's overseas production hub status in the UK.

Domestic Criticism Mounts, Sunak Faces Political Pressure

Despite Sunak's statement at the Jaguar Land Rover factory on the day of the agreement's announcement that the deal would "protect, save, and enhance jobs," domestic opposition is mounting. The Conservative Party criticized him for "outsourcing the China issue to Washington," undermining the UK's diplomatic independence. Some members within the Labour Party also worry that long-term reliance on the US will leave the UK passive in international affairs.

The Independent pointed out that although Sunak succeeded in breaking through the US-UK trade negotiations that four previous prime ministers failed to complete, the agreement is essentially just a "tariff exemption arrangement" for specific industries, not a comprehensive free trade agreement. Key sectors such as agriculture, pharmaceuticals, and film and TV still require further negotiation.

While financial experts and moderates support the move, believing that strengthening economic ties with the US is a realistic choice amid US-China tensions and global supply chain restructuring, there remain many questions about whether the UK can strike a balance between sovereignty and economic interests.

References

People Also Ask...

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What impact does the Anglo-American trade agreement have on our local film and TV industry? Could it impact our job opportunities?

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Will the US's authority to review Chinese investments in the UK-US trade agreement impact the UK's sovereignty and its China policy?

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In the trade agreement between the UK and the US, how will the US's authority to review Chinese investments specifically impact the UK's sovereignty and its China policy?