In a significant development for international trade, U.S. President Donald Trump announced on May 8, 2025, the establishment of a historic trade agreement with the United Kingdom, marking a breakthrough amid ongoing global trade tensions. This announcement came during a phone call with British Prime Minister Keir Starmer, where Trump expressed enthusiasm for the new agreement, describing it as the first of many to follow with other nations.
However, the agreement has raised alarms within the UK’s ethanol industry, which fears dire consequences from the changes it brings. A group of industry representatives has warned that the trade deal could have "catastrophic" effects on the British ethanol sector, particularly concerning the livelihoods of local producers. The deal allows for the importation of ethanol from the U.S. without tariffs—a move that some industry insiders believe could decimate domestic production.
As part of this new trade framework, the UK will expedite customs procedures for American goods and reduce tariffs on a range of imports valued in billions of dollars. Notably, this includes the elimination of tariffs on approximately 1.4 million liters (370 million gallons) of ethanol. This change is expected to intensify competition for British producers, who are already struggling to compete with the low prices of American ethanol.
Philip Davidson, Chairman of the National Farmers Union, voiced concerns over the impact of the tariff elimination. He stated, "With the cancellation of American restrictions, it will be nearly impossible for British producers to compete." The U.S. has been a dominant player in the ethanol market, exporting about 227 million gallons to the UK in the 2023-2024 marketing year, according to the U.S. Grains Council.
The implications of this trade deal extend beyond the ethanol producers to the agricultural sector at large. The National Farmers Union has indicated that the agreement poses a serious threat to British sugar beet farmers, who supply the crops necessary for ethanol production. The potential for increased imports of cheaper American ethanol could undermine the entire supply chain, affecting not only producers but also the farmers who grow the raw materials.
Amid these developments, Associated British Foods, which operates the Vivergo plant, expressed significant concern regarding the government’s decision to allow tariff-free imports from the U.S. The company emphasized that this decision is alarming for many individuals in northern England, including employees and suppliers involved in the bioethanol sector.
Similarly, the Ensus facility, a major producer of renewable ethanol in northern England, stated that the trade agreement raises critical questions about the viability of domestic green ethanol production in the UK. While they acknowledge the importance of the deal, they also fear that it could lead to a decline in local manufacturing capabilities.
Tom Wells, a spokesperson for Prime Minister Starmer, remarked on May 9, 2025, that the government has engaged with companies affected by the ethanol import policies and will maintain close communication in the weeks and months ahead. This suggests that the government is aware of the potential fallout and is seeking to address concerns from the industry.
As the UK navigates this new trade landscape, the balance between fostering international relations and protecting local industries remains a delicate issue. The ethanol sector’s fears reflect broader anxieties about the implications of trade agreements that prioritize imports over domestic production.
With Trump’s announcement heralding a new era of trade relations, it remains to be seen how these changes will unfold and what measures the UK government might implement to safeguard its domestic industries. The situation is evolving, and stakeholders across the agricultural and ethanol sectors are bracing for potential challenges ahead.
