The UK is the first country to reach an arrangement since Trump declared worldwide tariffs on what he called “liberation day.”
The United States and the United Kingdom have agreed to a “breakthrough” trade agreement by reducing some of President Donald Trump’s tariffs on steel, aluminium, and automobiles, which would save thousands of British jobs. Keir Starmer called it a “fantastic, historic day” as he announced the agreement.
Speaking to Jaguar Land Rover employees, Starmer claimed that this deal will help save many jobs in the steel and automotive industries that have been in danger.
The United States has agreed to cut the 25% tariffs on British steel and aluminium exports. They would lower American tariffs on up to 100,000 British autos from the 27.5% rate to 10%, which he initially announced. The US is the primary export market for British cars, with a value of almost £9 billion last year.
Washington pledged to provide “preferential treatment” to the UK pharmaceutical sector, which Trump has threatened with tariffs (though none has been established yet). American aircraft manufacturers will get preferred access to premium UK aerospace components. Most items are still subject to a baseline 10% tariff.
There is relief for US farmers who can access the UK, and British beef farmers can join a select few countries like Australia in accessing the US market.
Starmer stated that this approach would not weaken food standards, and chlorinated chicken or hormone-treated cattle imports are still prohibited.
He added that the UK would still negotiate in sectors like technology, where ministers want good ties with the US and the film industry, also imposed by tariffs.
Peter Mandelson, the UK’s ambassador to the US, stated that they will negotiate a technological collaboration in the upcoming months, and JD Vance, the US vice president, would play a major role.
Starmer and Trump announced a prearranged phone call, with the leaders on either end of the line and the media gathered.
Conservative leader Kemi Badenoch criticized the transaction, claiming that Trump has “shafted” the UK. America hiked its tariffs when the UK lowered them.
On the other hand, shadow trade secretary Andrew Griffith said that exporting companies would appreciate the tax cut.
The trade association also criticized the agreement that represents Detroit automakers, which said it unfairly penalizes US automakers who have cooperated with Canada and Mexico.
The American Automotive Policy Council (AAPC) stated that vehicles built in Canada and Mexico for its members, including Ford, General Motors, and Jeep manufacturer Stellantis, have 25% import taxes.
UK government officials stated the deal was merely a beginning point for more negotiations between the two parties.
The business and commerce secretary, Jonathan Reynolds, assured reporters that the UK would keep trying to lower the baseline duty of 10%. He said the deal did not contain any exemptions from the NHS, online safety regulations, or the digital services tax.
Trump’s trade adviser, Peter Navarro, stated that talks about a tax on internet services are ongoing. The digital tax has swept the globe like a nasty infection and targets American businesses.
The UK is the first country to reach an arrangement since Trump declared worldwide tariffs on what he called “liberation day.“
Since he announced the tariffs, the stock markets have plummeted for days until Trump imposed a 90-day suspension that ends in July.
The US was under pressure to sign tariff agreements to support its economy. For months, the president and his top advisors maintained that Trump’s trade policy allowed the White House to negotiate dozens of trade agreements, despite analysts warning that it may cause a recession.
Although they have not yet reached many agreements, US officials are in discussions with other major economies, such as Japan and India. This week, Treasury Secretary Scott Bessent announced that negotiations were underway with 17 countries.
