The United States and Britain today announced a plan for a symbolically important trade deal that is likely to reduce the financial burden of U.S. President Donald Trump's high tariffs and create greater access to American goods abroad.
The US and the UK were expected to announce today that they had concluded the trade agreement, but Trump told reporters in the Oval Office of the White House in front of British Ambassador Peter Mandelson: "The final details are being written, in the coming weeks everything will be concluded."
British Prime Minister Keir Starmer, speaking at a defense conference in London today, said that "negotiations with the US are ongoing."
The announcement of such a deal brought a political victory to Starmer, and also provided some evidence for Trump's claim that his tough approach to trade could perhaps balance the world economy, albeit on his own terms.
However, the terms of the agreement still need to be finalized before it can be signed, a reminder that the process Trump promised would be quick could drag on as other countries with which the US has a trade deficit worry that the Republican president's import tariffs will derail economic growth around the world.
The president said the agreement would lead to increased exports of American beef and ethanol to the UK, and customs simplification is also expected for other American goods, some of which are used for processing.
Speaking by phone with Trump today, Starmer emphasized the importance of the relationship between their countries and alluded to the fact that today is the anniversary of the victory in World War II in Europe.
"I think it's incredibly important that we can announce this great deal for the next 80 years on the same day and at the same hour as 80 years ago, when the UK and the US stood shoulder to shoulder," Starmer said.
The UK said the agreement with the US would reduce tariffs on cars from the UK from 27,5 percent to 10 percent and eliminate tariffs on steel and aluminium.
The British government said the deal would set a quota of 100.000 British vehicles that could be imported into the US at a 10 percent tariff. It said Trump's 25 percent tariff on British steel would be completely scrapped.
The UK said the agreement includes a new, reciprocal approach to the beef market and removes tariffs on ethanol used to make beer, which comes to the UK from the US.
The deal is the first announced since Trump began upending the global economy by dramatically increasing tariffs in an attempt to boost domestic production. The Republican president abruptly imposed tariffs upon returning to the White House, targeting traditional allies such as Britain with tariffs on steel, aluminum and cars. Trump announced tariffs on nearly every country in the world on April 2, then partially backed down a week later and said his administration would seek individual deals with countries over the next few months.
The US already has a trade surplus with the UK, making it easier to find common ground because Trump has aimed his tariffs at eliminating annual trade deficits with countries he says have "taken advantage of the US."
No new deals have been reached with America's biggest trading partners, including Canada, Mexico and China. Trump has left the highest tariffs in place for China, setting off a confrontation between the world's two largest economies. Washington and Beijing are sending officials to Switzerland this weekend for an initial round of trade talks.
Trump promised today that "many other deals that are in serious negotiation stages" will follow!
The US and the UK are aiming to strike their first bilateral trade deal since Britain voted to leave the European Union in 2016, allowing it to negotiate independently. Then-Prime Minister Boris Johnson had touted a future deal with the US as a boost for Brexit.
Negotiations began in 2020, during Trump's first term. But they have made little progress under President Joe Biden, a Democrat and Brexit critic. Talks resumed after Trump returned to office in January and have intensified in recent weeks.
The main goal of British negotiators was to reduce or eliminate tariffs on British car and steel imports to the United States, which Trump had set at 25 percent. The United States is the largest market for British cars - more than a quarter of the country's car exports in 2024, according to the UK's Office for National Statistics.
The UK has also sought tariff relief for pharmaceuticals, while the US wants greater access to the UK agricultural market. Starmer's government has said it will not lower UK food standards to allow imports of US chlorine-washed chicken or hormone-treated beef.
The British government sees the agreement as a confirmation of Starmer's approach to Trump, which has avoided direct confrontation or criticism. Unlike the European Union, the UK has not announced retaliatory tariffs on American goods in response to Trump's import tariffs.
A U.S. trade deal with Britain would be symbolically important and a relief for British exporters. But the deal would do little to address Trump's underlying concerns about persistent U.S. trade deficits with many countries that have prompted him to impose import tariffs.
According to the Census Bureau, the US had a trade surplus with the UK of $11,9 billion last year, and the $68 billion in goods the US imported from the UK last year accounted for just XNUMX% of total US imports.
The US is much more important to the UK economy. It was Britain's largest trading partner last year, according to government statistics, although the bulk of British exports to the US are services, not goods.
Trump has previously said his leverage in the negotiations will be American consumers, but he also said he expects the UK to start buying more American products.
A trade deal with the US is one of several that Starmer's government is keen to strike. On Tuesday, the UK and India announced a trade deal after three years of negotiations. The UK is also trying to remove some of the barriers to trade with the EU, imposed when it left the bloc in 2020.
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