The US President, Donald Trump, and UK Prime Minister, Keir Starmer, on Thursday announced a “breakthrough” trade agreement, reported Reuters.
The announcement, made by Trump at the White House’s Oval Office with Starmer joining via teleconference, marked the first since Trump imposed what he called “reciprocal tariffs” on imports to the US from all countries.
US-UK Trade Deal
According to a White House factsheet, the deal leaves a 10% tariff rate on British imports in place. It will also expand US market access in the UK, creating a $5 billion opportunity for new exports for US farmers, ranchers, and producers.
Meanwhile, tariffs on imported cars to the US will be reduced from 27.5% to 10% on a quota of 100,000 vehicles and the import taxes on steel and aluminum will go from 25% to zero, the Associated Press (AP) reported citing British officials.
Increased Market Access
On this occasion, Trump said: “This is now turning out to be, really, a great deal for both countries,” adding that the deal involves billions of dollars of increased market access for American exports, especially in agriculture, allowing more access for American beef and ethanol to the UK market.
Similarly, Starmer hailed the deal. “This is going to boost trade between and across our countries. It’s going to not only protect jobs, but create jobs, opening market access,” he said.
However, the deal’s final details are still in the making. “The final details are being written up. In the coming weeks, we’ll have it all very conclusive,” Trump told reporters.
Trump’s Tariff War
On April 2, Trump sent shockwaves across global markets, by announcing a 10% baseline tariff on all imports to the US, in addition to higher tariffs on some of the US largest trading partners, with which the country has the largest trade deficits.
Trump’s move sparked fear across the world of an economic recession and higher inflation. As a result, Trump later suspended most of the tariffs for 90 days, with many countries trying to negotiate with the US.
China took the hardest blow, which resulted in a tit-for-tat tariff spree between both countries, with the US tariffs against China reaching 145%, while Beijing’s tariffs against Washington stand at 125%.
Most recently, Washington and Beijing agreed to hold the first formal trade talks after tariff announcement. Thus, the US Treasury Secretary, Scott Bessent, and Trade Representative, Jamieson Greer, will meet with the Chinese Premier, He Lifeng, in Geneva, Switzerland, next Saturday.
