MercoPress. South Atlantic News Agency

US, UK reach trade deal marking Washington's openness to business

The new deal includes the lifting of a 25% tariff on UK steel

President Donald Trump announced a new trade deal between the United States and Britain, which he described as the first major such agreement of his second term. The announcement, made from the Oval Office with British Prime Minister Keir Starmer on speakerphone, highlighted the accord's benefits for both nations.

Both countries have agreed to work together to create a “strong, industrial base, appropriate export controls and protections for key technologies for industries like steel,” and other “things necessary for the military,” Trump explained.

“Together with our strong ally, the United Kingdom, we have reached the first, historic trade deal since Liberation Day. as part of this deal, America will raise 6 billion dollars in external revenue from 10% tariffs, 5 billion dollars in new export opportunities for our great ranchers, farmers, and producers, and enhance the national security of both the US and the UK through the creation of an aluminum and steel trading zone, and a secure pharmaceutical supply chain. This deal shows that if you respect America, and bring serious proposals to the table, America is open for business,” Trump also posted on Truth Social.

Starmer praised the deal as “really important.” It will “boot trade between in and across our countries, and not only protect jobs but create jobs,” he also pointed out.

Per the understanding, US agricultural products gain access to a key market fast-tracked through British customs with reduced non-tariff barriers. The move will generate US$ 5 billion in export opportunities and US$ 6 billion in revenue from a 10% tariff on UK imports. It also strengthens economic security through a steel and aluminum trading zone and a secure pharmaceutical supply chain.

From the UK's angle, the agreement lifts a 25% US tariff on steel and aluminum, reduces the tariff on most car exports from 27.5% to 10% for the first 100,000 vehicles annually, and exempts Rolls-Royce engines and airplanes from tariffs. A British airline will purchase US$ 10 billion in Boeing planes, supporting UK jobs.

The deal aligns with Trump’s broader strategy to negotiate favorable trade terms. Finalized amid global tensions, it is symbolically significant for the post-Brexit UK and meets Starmer’s approach to avoid confrontation with Trump. In 2024, the US had a US$ 11.9 billion trade surplus with the UK.

After the announcement, stocks surged as the S&P 500, Dow Jones, and Nasdaq all posted gains. In this scenario, US Treasury Secretary Scott Bessent revealed ongoing negotiations with 17 countries, with China being a particularly challenging partner. Meanwhile, Trump reaffirmed steep tariffs on Chinese goods, prompting renewed calls from China for their removal. The Federal Reserve, citing uncertainty in trade policies, decided to keep interest rates unchanged at 4.25% to 4.5%.