On May 8, the U.S. and UK officially finalized a bilateral trade agreement, maintaining a 10% tariff on UK goods. Trump announced on X platform that this agreement is 'comprehensive and complete' and revealed that trade negotiations with multiple countries are underway. Fox Business reporter Charles Gasparino quoted Wall Street executives saying that the White House is planning similar agreements with countries like India, Japan, South Korea, and Australia, with tariff levels expected to be anchored at 10%. China has been explicitly excluded from this '10% template' and faces entirely different high tariff barriers. Trump's 'reciprocal tariff' policy is accelerating its implementation, and the fissures in the global trade landscape have begun to emerge.
U.S.-UK Agreement: The 'touchstone' of the 10% tariff
(The Wall Street Journal) reported on May 9 that Trump and UK Prime Minister Starmer confirmed the framework of the U.S.-UK trade agreement via a White House call. The U.S. maintains a 10% baseline tariff on UK goods, while the UK reduces tariffs on U.S. goods from 5.1% to 1.8%, a decrease of 64%. X platform user @ChooLucia analyzed that this asymmetric adjustment means the UK 'lost out' on tariff concessions, while U.S. tariffs increased from 3.4% to 10%, showing that the Trump administration is also tough on allies. The UK's trade surplus with the U.S. is projected to reach $77.9 billion in 2024, and it originally hoped to negotiate for tariff exemptions, but the retention of the 10% tariff indicates that the U.S. aims to set a 'benchmark' for global trade negotiations.
The scope of the agreement has been criticized as 'superficial.' According to @ABCChinese on May 9, the agreement only involves a slight expansion of U.S. agricultural product access and a reduction in tariffs on British cars, without addressing the strict standards imposed by the UK on U.S. agricultural products or the non-tariff barriers that the U.S. has on British cars. X user @apeuniverse_eth commented: 'The UK traded a 10% tariff for a small sweetener in the car market; the Labour government is likely to face severe backlash at home.' Analysts believe that the U.S.-UK agreement resembles Trump's strategy to pave the way for subsequent negotiations with multiple countries, with the 10% tariff serving as a 'touchstone' to test the limits of allies.
Multi-country negotiations: The expansion of the 10% tariff template
Fox reporter Gasparino revealed on May 8 on X platform that the White House is in intensive discussions with countries like India, Japan, South Korea, and Australia, planning to promote the 10% tariff framework. Wall Street sources confirmed that this strategy aims to solidify trade relations with allies through bilateral agreements while generating momentum against China's high tariff policy. (Observer Network) analyzed on May 8 that Trump's negotiation priorities clearly lean towards 'geostrategic allies,' especially Asian countries that can counterbalance China.
The progress and resistance of negotiations among various countries vary:
India: The Modi government hopes to leverage the U.S.-China trade war to 'rise up' and promote 'Make in India.' However, (Observer Network) points out that opposition from Indian agricultural groups has turned the opening of agricultural markets into a 'minefield' for negotiations. X user @TradeInsider stated that India may compromise in the manufacturing sector, but agricultural issues are difficult to resolve in the short term. Japan: Shigeru Ishiba pledged to invest $1 trillion in the U.S., focusing on the purchase of American liquefied natural gas and agricultural products. (The New York Times) reported on May 8 that Japanese companies (such as Suntory) are optimistic about reducing tariffs by 24%, but Japan's rice protection policies and the U.S. barriers to automobile certification remain deadlocked.
South Korea: Han Deok-soo instructed to expedite negotiations to alleviate the pressure of a 25% tariff. South Korea may seek favorable terms by increasing energy purchases from the U.S.; however, under the KORUS FTA, tariffs on U.S. goods are already close to zero, limiting leverage.
Australia: Albanese publicly expressed dissatisfaction with the 10% tariff, arguing that it violates the Australia-U.S. Free Trade Agreement. (Observer Network) states that Australia prefers to resolve issues through negotiations rather than retaliatory tariffs, but progress is slow.
The White House's 'selective priority' strategy has sparked controversy. (Observer Network) cites sources saying that the Trump administration is currently only engaged in substantial negotiations with countries like India, South Korea, and Japan, while other countries are marginalized, highlighting geopolitical considerations.
China: The 'exception' game under high tariffs
In stark contrast to the 10% tariff treatment for allies, China faces an exceptionally high tariff of 145%. According to BBC Chinese on May 7, Trump raised tariffs on China from 125% to 145% on April 9, triggering severe market fluctuations. The Chinese Ministry of Commerce responded by stating that it would counter by imposing a 34% tariff on U.S. goods, filing a lawsuit with the WTO, and restricting rare earth exports. U.S.-China negotiations are currently making slow progress in Switzerland, with minimal advancement.
(Observer Network) analyzed that Trump's policy towards China is not only about economic containment but also aims to weaken China's export competitiveness through high tariffs, pushing supply chains to shift to countries like India and Vietnam. However, X user @GlobalTradeX pointed out that the maturity of the industrial chain in countries like India is hard to replace China in the short term, and the effectiveness of supply chain restructuring remains questionable. High tariffs may also drive up U.S. prices, exacerbating inflationary pressures. (The New York Times) warned on May 8 that global trade volume could shrink by 1% due to tariff barriers, putting economic growth under pressure.
The crossroads of global trade
The implementation of the U.S.-UK agreement marks a phased victory for Trump's 'reciprocal tariff' policy. X user @OrienteDawn believes that the rise of bilateral agreements may weaken multilateral mechanisms such as the WTO, leading the global trade system towards 'fragmentation.' (The New York Times) predicts that the proliferation of the 10% tariff will raise domestic prices in the U.S., posing downward risks to the global economy.
For China, high tariffs are both a challenge and an opportunity, potentially forcing industrial upgrades and expansion of domestic demand. The 'window of opportunity' for countries like India and Japan is constrained by domestic policies and complex geopolitics, making it difficult to shake China's position in the short term. Trump's '90-day negotiation window' has passed the halfway mark, and how countries balance concessions with interests in the ongoing game will determine the final landscape of global trade.
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