President Trump announced Thursday that the US intends to sign a trade deal with the UK.
Both sides consider the trade agreement to be deeply beneficial, and the transaction has been debated since Trump's first term. However, Thursday's announcement was lacking in detail. This reflects the rush of the Trump administration's efforts to negotiate with countries for more than decades and reshape the global trading system in months.
The agreement that Trump said would be the first for many will include the UK dropping tariffs on US beef, ethanol, sports goods and other products and buying a $10 billion Boeing plane. The US said in return it would soften the tariffs that Trump had fitted with cars and steel, but it levied 10% on all UK exports.
Neither government says it expects the agreement to be finalized. Documents released by the Trump administration on Thursday evening list half a dozen general priorities, saying the country will “develop and formalize” them to begin negotiations soon.
The UK government said it is still pushing to defeat 10% tariffs on most other goods. American officials said it would urge the UK to rethink taxes on technology companies. Officials from both governments will need to meet for the next few months to bring up a more specific language, revealing possible differences.
Nevertheless, leaders from both countries welcomed cooperation in Thursday's joint announcement, evoking deep ties between their countries. From his oval office, Trump, along with British Prime Minister Kiel Starmer, called “a great deal for both countries.” Starmer said it was the 80th anniversary of the allies' victory in Europe in World War II.
“There are no two countries that are closer than our two countries,” Starmer said. “And now we are bringing this into new and important areas by adding trade and economy to the intimacy of our relationship.”
Both British and American businesses, including American cow ranchers and dairy farmers, also praised the arrangement, but some lamented that tariffs between the two countries remained higher than when Trump took office.
The announcement comes as the US competes to finalise agreements with more than 12 other countries eager to avoid Trump's high tariffs. US authorities are negotiating with India, Israel, Japan, South Korea and Vietnam, among other trading partners, for contracts that will lower tariffs between the countries.
Trump officials will also head to Geneva this weekend to discuss trade issues with Chinese officials amid a fierce standoff that has halted trade with China and threatened to shut down many businesses.
Amidst the conflict with many countries, close ties with the UK appeared to be a low fruit for the Trump administration. British officials have been paying attention to the agreement with the US since leaving the European Union in 2020 as a way to offset trade cuts with Europe, and Trump has been hoping to do business with the UK since his first term.
Trump, who is sticking to the trade deficit, praises the country for its relatively balanced trade with the United States. Last month, the president imposed the UK the same 10% global tariffs he places on other countries, but not the higher “mutual” tariffs. It has been applied to many countries that ship more products to the US.
Officials said Thursday that their plans will have a 10% tariff on UK exports, but that Trump will roll back others wearing cars and iron. In return, the UK will provide billions of dollars in market access to American beef and other exports.
One of the UK's most contentious issues in recent months was the heavy tariffs Trump applied to car imports, threatening British companies such as Jaguar Land Rover and Aston Martin.
Under the terms of the new arrangement, the UK will be allowed to send 100,000 vehicles to the US at a 10% tariff. The UK government said vehicles shipped above that level will face 27.5% tariffs and will have zero US tariffs on British steel. According to Oxford Economics data, the UK sent 92,000 vehicles to the US in 2024.
According to the White House fact sheet, US companies will increase their ability to sell to the UK government and streamline customs procedures when selling to the UK. He also said the government will cooperate with economic security issues, including enacting global technology controls and setting up a safe supply chain for critical products such as steel and pharmaceuticals.
US officials hope the announcement will send a message to other American deals If they agree to open their market, they will also be able to see some of the tariffs Trump has applied for.
Trump's defenders praised his trading ability, saying the global tariffs he issued gave him extraordinary leverage than other countries. Critics portrayed the president as increasingly desperate to resolve the crisis in his own production as tariffs begin to push our prices up and dampen the economy.
Wall Street welcomed the news on Thursday, viewing it as an indication that the Trump administration may move to correct its relationship with other trading partners. The S&P 500 finished a 0.6% higher day after backing back some profits from the first half of Thursday.
Rob Howarth, senior investment strategy director at U.S. Bank Asset Management, said the market “supports the advances in this contract.” But he said, “This is clearly a market on the edge and I don't think we've yet out of the woods.”
The National Beef Beef Association, representing ranchers, praised the Trump administration for expanding access to the UK market.
“The trade agreement has brought President Trump a tremendous victory for American family farmers and ranchers,” said Buck Weybein, Nebraska cat craftsman who leads the group.
Other analysts weren't particularly impressed. “The “full and comprehensive” trade agreement between the United States and the United Kingdom is not like that, a “full and comprehensive” trade agreement hastily been announced by President Donald Trump and Prime Minister Kiel Starmer today,” wrote Paul Ashworth, North American economist in capital economics.
“This rush, showing progress in the 'trading', reveals the growing despair within the administration to roll back tariffs before reaching GDP growth and inflation,” Ashworth added.
The UK is the 11th largest commodity trading partner in the US, accounting for 2.9% of US total transactions in the first quarter. The US sent $80 billion in machinery, planes, natural gas, crude oil and other products to the UK in 2024, and bought $68 billion in automobiles, medicines and other products in return.
The US is the UK's largest single trading partner, but most of its trade relationships are in services and are not affected by tariffs.
The Trump administration notified Congress of its intention to negotiate a trade deal with the UK in 2018. However, due to Britain's resistance to American chemically treated beef and chicken, talks were less attention in Trump's first term as the US fears that American companies will push for deeper access to British national health services.
During the Biden administration, British officials continued to advocate for trade agreements, but made little progress due to Democrats' skepticism.
At a party at the UK ambassador's residence in Washington in late February, Starmer, who was visiting, told Secretary of Commerce Howard Lutnick, who has British interest in focusing on trade. Rutnick, who oversees the portfolio, including US trade policies, is linked to his counterpart at the UK government's Jonathan Reynolds. British officials have revealed to the Trump team that they wanted to be the first country they made a deal.
Trump's envoy to the UK, a former producer of his show “pupil,” Mark Burnett, was a supporter who was involved in early debates and tried to secure early deals with the country.
With Lutnick focused on The Big Picture and US trade representative Jamieson Greer, working together through details and implementation, the government has put forward a framework. Trump was also directly involved with Hoshi. Among them, he called for an 11th hour call to move the deal further, the British prime minister said Thursday.
Trump likes the idea that Britain is his first partner given his special relationship with the US, and according to anyone who knows what he thinks, he thought the agreement would send a good signal to the world. The UK is also not the main source of automobiles and steel for the US. This helped American officials to convince them to drop tariffs on these products.
The announcement also appears to certify his strategy of providing Stage with a much-needed political victory and cultivating a relationship with Trump.
However, some analysts have noted that they have skipped more controversial issues, such as the deal leaving more tariffs and opening the UK's healthcare market to US companies, as well as the digital services tax that the UK has imposed on American tech companies. They suggested that trade talks with other governments that are so closely allied with the United States could be difficult to finalize.
“For 40 days from the release date, the first and only deals are those operating a bilateral trade surplus that is not considered an issue on the release date, and I consider them as a bearish signal as to how difficult the next transaction will be,” he mentioned Trump's term on April 2, when the president unfolded his tariff plans. He later suspended most of the 90-day tariffs.
Other industry executives have expressed tension over the precedent that rolling back tariffs on foreign steel, aluminum and cars could be set for other negotiations.
Matt Blunt, chairman of the American Auto Policy Council, representing Ford, General Motors and Stellantis, said his group was “very disappointed” that the administration prioritized the UK over Canada and Mexico.
Brandt said it would be cheaper to import cars from the UK than cars from Mexico or Canada, which could potentially source half of the US portion.
Marklandler, Eshe Nelson and Daniel Kay Reports of contributions.
