New plans unveiled by Rishi Sunak and Joe Biden could give UK businesses access to billions in US green funding.
In addition to stepping up cooperation on AI and including a data protection agreement, the Atlantic Declaration would give British electric car companies access to new US green tax credits and subsidies.
Congress may have to approve the agreement, and in some cases, state-by-state agreements must be reached in the US.
According to Mr. Sunak, the agreement "sets a new standard for economic cooperation.".
Following the demise of hopes for a comprehensive free trade agreement, the agreement was reached. Mr. Sunak stated on the flight to Washington that the issue has not been a top priority for the US or the UK for quite some time. ".
In response to the economic challenges posed by China and Russia's invasion of Ukraine, UK officials insist that a new targeted strategy outlined in the Atlantic Declaration was a better response.
The agreement would lessen some of the economic harm caused to the UK by the US flagship Inflation Reduction Act (IRA).
Mr. Biden's main initiative, which includes $370 billion (£297 billion) to increase the production of green technologies, is geared toward expanding the US domestic energy market.
According to current regulations, the IRA offers tax credits worth $3,750 (£3,000) for each electric vehicle (EV) made in the US or using materials mined, processed, or manufactured there.
The UK already exports to the US a net amount of raw materials for EV batteries. However, countries without a US trade agreement are not permitted to receive IRA subsidies. .
The Atlantic Declaration commits the US and the UK to working on a new Critical Minerals Agreement, which would grant buyers of vehicles made with critical minerals access to tax credits. These minerals are processed, recycled, or mined by UK companies.
The declaration states that the agreement would be put into effect following consultation with the US Congress.
Japan already has a similar agreement that enables Japanese businesses to avoid export taxes on minerals used to make EV batteries.
A pledge to create a "new UK-US Data Bridge" is also made in the declaration. This would enable UK businesses to freely transfer data to approved US organizations without having to pay a fee.
Around 55,000 UK businesses, according to estimates from Downing Street, will be impacted by the change, which will result in annual direct savings of £92.4 million.
Mr. Biden additionally backed Mr. Sunak's plans to organize an international summit on AI security, which will take place in the UK later this year.
"The UK and US have always pushed the limits of what two countries can achieve together," the prime minister said.
So it makes sense that we would turn to each other to forge a stronger economic future as we deal with the greatest economic transformation to hit our countries since the Industrial Revolution. .
The Atlantic Declaration "sets a new standard for economic cooperation, propelling our economies into the future so we can protect our people, create jobs, and grow our economies together. " .
Both Mr. Biden and Mr. Sunak concur that efforts will be increased to exclude Vladimir Putin's Russia from the international civil nuclear market. Work will be done to increase the resilience of supply chains.
