Trump and UK Starmer Strike First Major Post-Tariff Trade Deal/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The United States and United Kingdom have agreed to a sweeping new trade deal, marking the first major pact of President Trump’s global tariff era. The agreement, reportedly focused on lowering tariffs for cars, steel, and technology, is expected to serve as a model for other pending negotiations. Markets responded positively ahead of pivotal U.S.-China trade talks.
U.S.-U.K. Trade Pact Quick Looks
- Deal Details: Focused on reducing tariffs for cars, steel, and U.S. farm equipment.
- Market Impact: U.S. and European stocks rose, dollar strengthened 0.5%.
- Trump’s Take: Calls the agreement “a very big and exciting day.”
- UK’s Approach: PM Starmer avoided retaliation, helping finalize the deal quickly.
- Economic Context: U.S. had a $12B trade surplus with U.K. in 2024.
- Strategic Timing: Deal announced ahead of crucial U.S.-China negotiations in Switzerland.
- Baseline Tariffs: U.K. faced only a 10% levy under Trump’s tariff policy.
- Tech and Agriculture: UK to lower taxes on U.S. tech, farm equipment.
- Broader Agenda: At least 16 trade deals still in progress globally.
- Investor Confidence: Analysts view this deal as a template for easing tensions.
Deep Look: U.S.-U.K. Trade Deal Sets Tone for Trump’s Global Strategy
The U.S. and United Kingdom announced a landmark trade agreement Thursday morning, marking the first major deal under President Donald Trump’s aggressive global tariff regime. While the full terms remain under wraps, early reports suggest the deal centers on reducing tariffs on British cars and steel and easing U.K. import taxes on American agricultural equipment and tech companies.
President Trump hailed the agreement in a Truth Social post as a “very big and exciting day” for both nations and teased that “many other deals… are in serious stages of negotiation.”
British Prime Minister Keir Starmer visited the White House earlier this year to lay groundwork for the deal, adopting a pragmatic approach rather than retaliating with countermeasures—a posture that appears to have paid off.
“It’s not sensible to jump into a trade war with the United States,” Starmer reportedly told advisers following Trump’s global tariff rollout in April.
“The final details are being written up,” Trump told reporters. “In the coming weeks, we’ll have it all very conclusive.”
The president said that the agreement would lead to more beef and ethanol exports to the U.K., which would also streamline the processing of U.S. goods though customs.
Starmer, speaking over the phone to Trump, stressed the importance of the relationship between the two countries as the anniversary of the World War II victory in Europe was being commemorated.
“To be able to announce this great deal on the same deal 80 years forward, almost at the same hour and as we were 80 years ago with the U.K. and the U.S. standing side by side, I think is incredibly important,” Starmer said.
Trump promised on Thursday that there are “many other deals, which are in serious stages of negotiation, to follow!”
Starmer, speaking at a defense conference in London, said “talks with the U.S. have been ongoing, and you’ll hear more from me about that later today.”
In contrast to other global players, the U.K. was hit with only a 10% baseline levy, compared to the 145% tariffs imposed on Chinese goods. That measured approach helped facilitate the agreement, which analysts believe may act as a blueprint for future bilateral trade deals.
Trade and Economic Context
In 2024, the U.S. enjoyed a $12 billion trade surplus with the U.K.—a rare position, as most of America’s major trading relationships run deficits. Key U.K. exports to the U.S. include cars and pharmaceuticals, while Britain imports large volumes of American crude oil and gas.
Bloomberg and The Guardian both reported that the new pact would reduce tariffs and taxes in several high-profile sectors:
- Cars and Steel: Tariff reductions from both sides.
- Farm Equipment: U.K. to ease restrictions on U.S. machinery.
- Tech Firms: UK may cut taxes on U.S.-based digital services.
The announcement sent European stock indexes and U.S. stock futures higher, with the U.S. Dollar Index climbing 0.5%. The timing was especially strategic, coming just before scheduled U.S.-China trade talks this weekend in Switzerland.
“This adds to the positive momentum heading into critical negotiations,” said George Vessey, FX strategist at Convera.
Markets have grown increasingly volatile amid the uncertainty of Trump’s trade agenda, which began in early April with sweeping import tariffs under the banner of “economic liberation.” While the White House touts these policies as a boon for domestic manufacturing, critics warn they could stoke inflation and global friction.
What’s Next?
All eyes now shift to Beijing and Washington, where trade tensions are running high. Treasury Secretary Scott Bessent said the upcoming U.S.-China talks represent a chance to “de-escalate” the tariff-driven standoff that has led to an effective embargo between the two economic superpowers.
In the broader landscape, the U.S. still has at least 16 major trade deals pending. The U.K. deal could provide a template for customized, bilateral agreements that Trump has long preferred over multinational accords.
The White House views the U.K. pact not only as an economic milestone but also a diplomatic statement of intent: Washington remains open to cooperation—but only on Trump’s terms.
You must Register or Login to post a comment.