The US has struck a trade deal with the UK – its first major pact since the wave of international tariffs were announced.
Negotiations were ramped up after the UK was placed in the 10% baseline tariffs category.
President Donald Trump, writing on his Truth Social account, said, “The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.”
The deal is the second major trade deal for the UK in a week, coming hot on the heels of a wide-ranging agreement with India, which included clean energy.
Previously US tariffs on UK exports were 25% on steel and aluminium, 25% on cars and a 10% blanket tariff on goods, while UK tariffs on US exports included cars (10%), digital services (2%), and foodstuffs such as beef (12%).
UK Prime Minister Keir Starmer, speaking at a West Midlands car factory, said tariffs on steel and aluminium will now be reduced “to zero”, and automotive tariffs will drop from 27.5% to 10%, for 100,000 vehicles a year, after his teams worked “day and night” in securing the deal.
In turn, President Trump said US chemical, machinery and “industrial” companies will get improved access to the UK market.
UK farmers are to be given a tariff free quota for 13,000 metric tonnes and there will be “no weakening” of UK food standards on imports.
Lord Mandelson, UK Ambassador to the US, said, “If we’re going to rebalance and rebuild international trade, that serves all our interests, then we’re better doing that together than apart.
“[Addressing the President] You said to the [UK] Prime Minister that you would do a good trade deal with the UK, and at pace, and you’ve been true to your word. It’s the end of the beginning – there is yet more we can do in reducing tariffs.”
President Trump said it was “a great deal for both parties.”
“We’ve been trying for years to make a deal – even in my first term, and 25 years before that,” he said. “It’s going to grow of its own volition – there will be changes and adjustments over time, but it’s very conclusive. It’s going to be special for the UK and the United States.”
He said China “very much wants to make a deal, we will see how that works out.”
The US and UK will collaborate in key areas of advanced technology, such as biotech, life sciences, quantum computing, nuclear fusion, aerospace and space.
Prime Minister Starmer said a meeting will be held with the European Union next Monday, hinting another deal may be in the offing.
Shevaun Haviland, Director General of the British Chamber of Commerce, said the deal will be met “with a huge sigh of relief” by many British businesses.
“The reduction in the 25% tariffs on most of our automotive exports and the removal of levies on steel and aluminium are the biggest wins,” she said.
“These sectors had been left reeling as jobs, investment and sales were all cut or put on hold. This framework agreement will give them some much needed certainty. They will be keen to see it quickly enacted so they can swiftly re-establish orders and supply chains.”
But she agreed with the UK Ambassador that this must not be the end of the process.
“We must continue to push the argument for free and fair trade across all economic sectors and that tariffs are a lose-lose position. The commitment to pursue a digital trade deal and make commerce easier in the future is also a worthy ambition.”
“Global trading conditions remain precarious. There must be a bold reset agenda with the EU to reduce trade costs, and it must help UK companies seize the opportunities in the fast-growing Indo-Pacific region.”
