According to new plans unveiled by Rishi Sunak and Joe Biden, UK businesses could have access to billions in US green funding.
The Atlantic Declaration expands AI cooperation, includes a data protection agreement, and would give British electric car companies access to new US green tax credits and subsidies.
Congress's approval and, in some cases, state-by-state agreement in the US may be required for the deal to go through.
The agreement, according to Mr. Sunak, "sets a new standard for economic cooperation.".
After hopes for a comprehensive free trade agreement were given up, the agreement was reached. "That hasn't been a priority for either the US or UK for a while now," Mr. Sunak said during the flight to Washington. ".
According to UK officials, the Atlantic Declaration's new targeted strategy was a better response to the economic challenges brought on by China and Russia's invasion of Ukraine.
The agreement would lessen some of the economic harm that the US flagship Inflation Reduction Act (IRA) would cause to the UK.
The main initiative of Mr. Biden focuses on expanding the domestic energy market in the US and includes $370 billion (£297 billion) to promote the development of green technologies.
For each electric vehicle (EV) produced in the US, or using materials mined, processed, or manufactured there, the IRA currently offers a tax credit worth $3,750 (£3,000).
EV battery raw materials are already a net export from the UK to the US. But access to IRA subsidies is restricted to countries without a US trade agreement. .
The Atlantic Declaration commits the US and UK to drafting a new Critical Minerals Agreement, which would grant tax credits to consumers of vehicles made with critical minerals extracted, processed, or recycled by UK businesses.
According to the declaration, US Congress would be consulted before the agreement was put into effect.
Similar arrangements already exist in Japan, allowing Japanese businesses to avoid export taxes on minerals used to make EV batteries.
The declaration also pledges support for a "new UK-US Data Bridge," which would enable UK businesses to freely transfer data to approved US organizations without having to pay a fee.
According to estimates from Downing Street, the change will have an impact on about 55,000 UK businesses and result in annual direct savings of £92.4 million.
Additionally, Mr. Biden backed Mr. Sunak's plans to organize a global summit on AI security, which will take place in the UK later this year.
The UK and US have consistently pushed the limits of what two nations can accomplish together, according to the prime minister.
"Therefore, it makes sense that we would turn to one another to create a stronger economic future when faced with the greatest transformation of our economies since the Industrial Revolution. .
"The Atlantic Declaration establishes a new benchmark for economic cooperation, launching our economies into the future so we can jointly safeguard our citizens, generate jobs, and expand our economies. " .
Both Mr. Biden and Mr. Sunak concur that work will be done to increase supply chain resilience, and initiatives to exclude Vladimir Putin's Russia from the international civil nuclear market will be stepped up.