One year on: The hidden impact of Trump’s trade deal with the UK
Politico | 5 May 2026
One year on: The hidden impact of Trump’s trade deal with the UK
By Sophie Inge
Keir Starmer took two losses on the same night last May — one that played out on screens before millions, the other largely hidden from view.
On May 8, as the prime minister watched his beloved Arsenal football club take on Paris Saint-Germain from his Downing Street flat, he was interrupted by a surprise call he couldn’t ignore.
On the line was U.S. President Donald Trump, pressing for last-minute trade concessions for bioethanol and pork as part of a wider deal that would secure tariff reductions for British cars and steel.
Starmer chose bioethanol and rejected pork. Arsenal lost.
Soon after, Britain’s domestic bioethanol industry — which converts crops like wheat into renewable fuel blended into petrol — began to unravel.
The Vivergo plant in Hull was forced to shut, while the only remaining facility, run by Ensus in Teesside, was left fighting for survival.
One year on, the consequences of that phone call are still rippling through Britain’s arable heartlands.
Starmer’s decision was “uninformed at best, and perhaps a little ignorant at worst,” said James Mills, a farmer in Yorkshire who supplied the wheat used by the Vivergo plant for over a decade before it was shuttered.
By granting the U.S. a 1.4 billion-liter duty-free quota for bioethanol — roughly the size of the U.K.’s domestic bioethanol sector — the government had effectively traded away an entire industry in return for concessions elsewhere in the economy, Mills said.
“There is obviously a huge political weight behind the U.K. car industry, and that’s well understood in the corridors of power,” he added. “But the significance of a plant in Teesside or the Humber to the wider arable supply chain just isn’t understood.
“It further confirmed that the government don’t really think of U.K. agriculture and the allied industries first — that we’re a bit of a footnote in their negotiations. You can only negotiate an industry away once — and it feels like they’ve done that already.”
A government spokesperson said the deal was secured “in the national interest and is protecting thousands of jobs and creating opportunities for businesses right across the U.K., including in the whisky and farming sectors.”
Wheat prices under pressure
As a result of the scaling back in bioethanol production, farmers say they lost a key buyer for British wheat, with the two plants together able to process up to 2 million metric tons a year. The result has been weaker competition in grain markets and the erosion of a price premium growers long relied on.
For many, that premium — once worth up to £5 per ton — was the difference between making a profit and a loss each year.
“As farming businesses, we operate in low single-figure percentage points,” said Mills. “The loss of four or five pounds a ton really hurts.”
Farmers like Mills have managed to find alternative buyers, but at a cost.
“We’ve had to find other intakes,” he said. “Whereas before we could produce [wheat] for ethanol and animal feed, it’s now just going solely for animal feed. And because there’s more wheat available in the U.K., prices are depressed. Our ability to make a profit has been drastically impacted.”
Further north, the impact has been even more stark. In September last year, when the Ensus plant was mothballed, the loss of domestic bioethanol demand effectively knocked around £8 to £10 per ton off local wheat prices.
Brett Askew, an arable farmer outside Newcastle who supplies the plant, said the closure wiped around £25,000 off his bottom line this season. “That’s a whole wage,” he said. “We barely cover our costs.”
Government support
Earlier this year, as the Iran war sparked fears of a carbon dioxide shortage, the U.K. government swooped in with a £100 million support package to temporarily restart production at Ensus — a key domestic source of the gas, which is essential to industries from food and drink to healthcare.
Local wheat prices have since recovered somewhat, but Askew said the rebound only underlined the fragility of the market.
“That jump is the Ensus effect,” he said. “Without that demand, the price drops away.”
Without further government support, he fears the plant will not be able to stay open.
“Ensus can only afford to run because of the support the government are giving them.” Askew said. “As it stands, it won’t stay open without that support going forward.”
Farmers’ concerns are reflected in the data.
The Agriculture and Horticulture Development Board (AHDB) is forecasting total cereals demand for human and industrial sectors — which includes the bioethanol industry — to fall to 9 million tons this crop year — the lowest since electronic records began in 1999-2000. Meanwhile, demand for wheat is expected to fall to just 6.5 million tons — the lowest level since the 2006-2007 crop year.
“There are a couple of other things feeding into that as well, but the majority of that is driven by the decline in bioethanol demand,” explained Helen Plant, lead analyst for cereals and oilseeds at AHDB.
Iran war impact
The ongoing Iran conflict has compounded farmers’ financial woes.
Disruption to trade flowing through the Strait of Hormuz — a critical chokepoint for global oil and gas flows — has driven up energy prices, pushing up the cost of fertilizer production, which is heavily dependent on gas.
Fertilizer prices are now projected to rise sharply — but without a corresponding increase in grain prices, margins are being squeezed further.
Askew said soaring fertilizer costs could force him to scale back production next season, leaving some land unplanted to limit financial risk.
“If I went and planted wall-to-wall with sky-high fertilizer — with prices three times that of the wheat crop — it’s just a recipe for financial disaster.”
With all the pressures arable farmers are now facing, Jamie Burrows, Combinable Crops Board Chair at the National Farmers’ Union (NFU), said many were being forced into increasingly difficult financial decisions.
“There just isn’t the cash flow to cover these costs — and that’s where it worries me,” he said.
“You’ve got businesses now having to go and look at credit with banks or with the merchants they buy their seed and fertilizer from, even more than they were before — just to stand still.”
The government spokesperson quoted above said: “We stand ready to support our farming industry and critical sectors and will continue to work closely with industry to tackle the impacts of events in the Middle East.”
Animal feed imports
The decline in bioethanol production has also disrupted the country’s wider agricultural ecosystem. At full capacity, the plants produced up to three-quarters of a million tons of high-protein animal feed.
James McCulloch, head of feed at the Agricultural Industries Confederation, which represents the agri-supply industry, said the scaling back in production has reduced access to domestically produced feed ingredients, forcing the industry to rely more heavily on imports.
Before the agreement, feed mills supplying ruminants such as cattle and sheep sourced around 58 percent of their ingredients from within the U.K. That figure has now fallen to 49 percent — a 9 percentage point drop — with an additional 680,000 tons of feed ingredients being imported, according to McCulloch’s calculations.
He warned that growing reliance on imports could leave the U.K. more exposed to disruption.
“The more import-reliant we become, the less resilient we become in terms of being able to absorb shocks to the supply chain,” he said.
The impact is already being felt on farms. NFU Deputy President Paul Tomkins said his dairy farm in the Vale of York previously sourced high-protein feed from the Vivergo plant, but has since had to switch to alternative sources as domestic production has declined.
“It was a good example of a circular economy. Wheat goes in and ethanol and a high-protein feed come out. That’s how food systems should work.”
In addition to animal feed, the facilities also produced carbon dioxide as a byproduct used in the slaughter of livestock — making them a key part of the food supply chain.
While the temporary reopening of the Ensus plant has eased immediate fears of shortages, Lizzie Wilson, chief executive of the National Pig Association, warned that any disruption could have “huge ramifications on farm,” with pigs “unable to move through the supply chain.”
Scotch whisky tariffs
Farmers may also have Trump to thank for another hit to their incomes over the past year, after U.S. tariffs on Scotch whisky helped weaken demand for barley.
Scotch whisky exports to the U.S. plummeted following the introduction of 10 percent duties on the spirit, a move that contributed to distillers scaling back production.
That slowdown has fed through directly into the farming sector, adding to what AHDB predicts will be a record-weak outlook for barley demand.
NFU Scotland’s Combinable Crops Chair Jack Stevenson, an arable farmer in Aberdeenshire, said the tariffs had clearly “had a knock-on effect,” with demand for his barley dropping by about 50 percent as local distilleries cut purchases.
Trump has since announced a lifting of the tariffs following King Charles III’s state visit to the U.S., prompting cautious optimism in the sector.
Stevenson said Trump’s decision to lift the tariffs “has to help the industry in general,” particularly given the importance of exports, but warned that any improvement will take time to reach farm incomes. “It’s not going to have an instant effect,” he said.
One year on from Starmer’s mid-match phone call, Britain benefits from lower U.S. tariffs on automotive exports, while steel duties are stuck at 25 percent.
As Mills contemplates the price that the agricultural sector paid for this deal, the exchange clearly still rankles.
“We’ve not actually seen very much for having traded away that entire industry — and that’s perhaps what hurts the most.”
