US President Donald Trump formally announced a new trade agreement with the United Kingdom on Thursday, May 8, 2025, marking the first major trade deal of his second term. The announcement was made during a phone call between Trump and British Prime Minister Keir Starmer, who was visiting a factory in the West Midlands. Trump was in the Oval Office surrounded by his aides and the UK's ambassador to the United States, Peter Mandelson.
The most important provisions of the agreement:
Reducing tariffs on British cars: The United States reduced tariffs on British cars from 27.5% to 10%, with an annual quota of 100,000 cars that can be imported at this reduced rate.
Elimination of steel and aluminum tariffs: The United States has removed tariffs on steel and aluminum imports from the United Kingdom, boosting exports of these vital industries.
Opening the UK market to US agricultural products: The UK agreed to increase imports of US agricultural products, including beef and ethanol, and reduce non-tariff barriers to facilitate customs procedures.
Facilitations for US exports: US products, such as chemicals and machinery, will gain easier access to the UK market, with faster customs clearance procedures.
Feedback:
President Trump described the agreement as a "major achievement" and "the beginning of a new golden age for America," emphasizing that the deal will not be a model for other countries, as other countries may face more stringent terms.
For his part, British Prime Minister Keir Starmer praised the agreement, considering it an important step toward protecting jobs in the British automotive industry and strengthening bilateral relations.
Economic impacts:
U.S. Commerce Secretary Howard Lutnick expects the agreement to open up $5 billion in new market opportunities for U.S. exporters.
Although the UK accounts for only about 3% of total US trade, financial markets welcomed the agreement, with US stocks rising on the announcement and the easing of restrictions on AI chip exports.
Next steps:
While the general framework of the agreement has been announced, some details are still under negotiation and are expected to be finalized in the coming weeks.
