US President Donald Trump touted a “breakthrough trade deal” between the U.S. and United Kingdom as he announced the first agreement since he imposed sweeping tariffs earlier this year that ignited a global trade war and rattled financial markets.
Keir Starmer struck a trade deal with Donald Trump last week making the UK the first country to strike an agreement with the USA since the trade tariffs were announced.
The agreement will open up the British market to American beef, ethanol, and other agricultural products, the White House said. It will also allow British cars and steel better access to U.S. consumers.
Under the still-evolving deal, the reciprocal tariff rate of 10% is in effect. In other words, Trump kept a 10% baseline tariff on British products imported to the United States.
Furthermore, car export tariffs will reduce from 27.5% to 10% – saving hundreds of millions a year for Jaguar Land Rover alone. This will apply to a quota of 100,000 UK cars, almost the total the UK exported last year.
Specifically, the first 100,000 vehicles imported into the U.S. by UK car manufacturers each year are subject to the reciprocal rate of 10% and any additional vehicles each year are subject to 25% rates.
The two sides differed on some key details, pointing to the hastily arranged nature of the agreement.
The British government released a statement saying US tariffs on steel will go to zero, but the White House put out its own description saying they “will negotiate an alternative arrangement” to the tariffs on steel and aluminum and that the agreement creates “a new trading union.”
“The UK steel industry which was on the brink of collapse just weeks ago will no longer face tariffs. The prime minister Keir Starmer negotiated the 25% tariff down to zero, meaning UK steelmakers can carry on exporting to the US,” the UK government said in its release.
“We will also remove the tariff on ethanol – which is widely used in our manufacturing sector – coming into the UK from the US, down to zero,” the UK’s statement reads.
The deal opens the way to a future UK-US technology partnership through which the two science-rich nations will collaborate in key areas of advanced technology, such as biotech, life sciences, quantum computing, nuclear fusion, aerospace and space.
Other details are still in the works, Trump said.
“The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol, and virtually all of the products produced by our great farmers,” Trump said after the signing of the agreement with UK’s prime minister Keir Starmer.
