President Donald Trump and British Prime Minister Keir Starmer announced a historic trade agreement on Thursday. The agreement aims to reduce tariffs and enhance market access for both nations.
The deal maintains a 10% U.S. baseline tariff on UK imports but includes significant concessions to bolster economic ties and counter global trade challenges.
“This is a huge deal,” Trump said from the Oval Office, describing the agreement as a “great deal” for both countries but emphasizing that the 10% tariff rate is “non-negotiable” and a “low number” compared to potential rates for other nations with “massive trade surpluses.”
The agreement cuts U.S. tariffs on British automobiles from 27.5% to 10% for the first 100,000 vehicles annually, a move Starmer said would protect thousands of jobs at UK manufacturers like Jaguar Land Rover. It also eliminates tariffs on British steel and aluminum, previously subject to 25% under Section 232 measures, creating a joint free trade zone for these metals.
“It will remove tariffs on British steel and aluminum, reducing them to zero,” Starmer said at a Jaguar Land Rover plant in the West Midlands, adding that the deal grants “unprecedented market access for British farmers without compromising our high standards,” The Guardian reported.
To uphold food standards, the UK will maintain bans on hormone-treated beef and chlorinated chicken, but it will offer reciprocal market access for 13,000 metric tonnes of tariff-free UK beef and eliminate tariffs on U.S. ethanol.
The agreement will open up a “$5 billion opportunity for new exports” for U.S. agricultural products, including $700 million in ethanol and $250 million in other products. The deal secures supply chains for U.S. aerospace manufacturers through preferential access to UK components.
“The Economic Prosperity Deal with the United Kingdom is a critical step forward in a special relationship to promote reciprocal trade with a key ally and partner,” the White House said in a fact sheet announcing the deal.