UK and US strike up trade deal: What to know

The US and the UK have struck up a trade agreement during what government officials say is a “historic day” that aims to “boost trade between and across our countries”. In the Oval Office, US president Donald Trump was joined via phone by UK prime minister Keir Starmer for a press conference announcing the new deal.

With it, according to Trump, the UK has agreed to “release or reduce numerous non-tariff barriers that unfairly discriminate against American products”. “[The UK] will also be fast-tracking American goods,” Trump noted, before adding that goods that weren’t previously allowed in the UK would become available under the new trade agreement. The UK will also enter into an economic security alignment with the US.

“With this deal the UK joins the US in affirming that reciprocity and fairness is an essential and vital principle of international trade,” Trump said. “The deal includes billions of dollars of increased market access for American exports, especially in agriculture.”

10 percent tariff to remain in place

Trump called the agreement–a first between the US and another nation following the president’s tariffs upheavals–a “victory” that will be “so good” for both countries. Final details will be written out in coming weeks, but the actual deal is a really “conclusive” one, Trump noted.

Following Trump’s speech, US secretary of commerce Howard Lutnick affirmed that there would still be a 10 percent tariff in place, which would produce six billion dollars of revenue for the US. The deal would also “add five billion dollars of opportunity to American exporters”, Lutnick noted.

Trade deal hailed a ‘victory’ for both countries

At the crux for both parties is hope that such an agreement will calm the waters of uncertainty surrounding the ongoing trade war between certain nations, following Trump’s now infamous ‘Liberation Day’ tariff hikes, which were swiftly followed by a 90-day tariff pause on certain countries.

Trump, who is likely attempting to reverse any backlash garnered towards his stringent tariff policies, had already stated on his social media platform Truth Social earlier in the day that the agreement with the UK was “a full and comprehensive one that will cement the relationship between the US and the UK for many years to come”.

It does appear that Trump is also planning more announcements of a similar scale, confirming in his speech that the US was close to numerous deals, with a meeting due in Switzerland on Saturday. In the post on Truth Social, the president said the deal with the UK was the “FIRST announcement”, with “many other deals, which are in serious stages of negotiation, to follow”.

US planning similar agreements with other nations

Trump had hit a pause on increasing tariffs for certain nations that he said had entered discussions with the US to negotiate resolutions surrounding trade. It is believed that the EU is one of such regions, with the European Commission, in response to Trump’s own pause, having announced a freeze on retaliatory tariffs against the US back in April.

While negotiations between the US and EU are ongoing, Trump has not expressed the same level of favour to the region as he has towards the UK. In February, the president had told the BBC that he felt the EU had been “really out of line” in regards to its trading relations with the US. This differed from the perspective Trump had previously shared towards the UK, which he had said was similarly “out of line”, but that a deal could “be worked out”.

UK turns attention to EU deal

Further tension could be heightened if Trump decides to enact a full halt on the de minimis tax exemption for all countries importing into the US. The Trump Administration had dismantled the rule–allowing for small packages valued at under 800 dollars to enter the US duty-free–earlier this month on all Chinese imports, yet many organisations representing US businesses are calling for a full halt for other countries too, in order to avoid an influx of cheap Chinese goods to enter the US from third party countries.

The UK government has been weighing similar adjustments to its own de minimis policy, which currently allows goods valued at 135 pounds or less to be imported without consumers paying duties. Akin to the US, officials say this would come as part of wider plans to mitigate the impact of “practices that undercut fair trade” and “cheap imports [flooding the] markets”.

The UK is also eyeing the establishment of a post-Brexit trade deal with the EU, which chancellor Rachel Reeves had previously told the BBC was more of a priority in comparison to its talks with the US.