logo
Trump, Starmer hail limited trade deal

Trump, Starmer hail limited trade deal

US President Donald Trump and British Prime Minister Sir Keir Starmer have announced a limited bilateral trade agreement that leaves in place Trump's 10% tariffs on British exports, modestly expands agricultural access for both countries and lowers prohibitive US duties on British car exports.
The "general terms" agreement is the first of dozens of tariff-lowering deals that Trump expects to land in coming weeks after upending the global trading system with steep new import taxes aimed at shrinking a $US1.2 trillion ($NZ2 trillion) US goods trade deficit.
Trump hailed the deal in the Oval Office with Starmer patched in on a speaker phone, as US Treasury Secretary Scott Bessent and top trade negotiator Jamieson Greer head to Switzerland to launch negotiations with Chinese negotiators.
He pushed back against seeing the United Kingdom deal as a template for other negotiations, saying that Britain "made a good deal" and that many other trading partners may end up with much higher final tariffs because of their large US trade surpluses.
In April, Trump imposed reciprocal duties of up to 50% on goods from 57 trading partners including the European Union, pausing them days later to allow time for negotiations until July 9. He has also heaped new 25% tariffs on auto imports, ended all exemptions on steel and aluminum duties, and announced new tariff probes on pharmaceuticals, copper, lumber and semiconductors. This week he added movies to the list.
"It opens up a tremendous market for us," Trump told reporters, noting that he had not fully understood the restrictions facing American firms doing business in Britain.
"This is a really fantastic, historic day," Starmer said, noting that the announcement came nearly at the same hour 80 years ago when World War Two ended in Europe. "This is going to boost trade between and across our countries, it's going to not only protect jobs, but create jobs, opening market access."
The two leaders heralded the plan as a "breakthrough deal" that lowers average British tariffs on US goods to 1.8% from 5.1% but keeps in place a 10% tariff on British goods.
A UK official told reporters that the United States and the United Kingdom have more serious work to do, and noted the deal did not include Washington's demand for restructuring of Britain's digital services tax, levied at 2% of UK revenue for online marketplaces. Washington could revisit the issue, but there was no agreed process for doing so, the official said.
"This is not a finished, classic 'bells and whistles' free trade agreement. It started off as a tactical response to President Trump's tariffs, but actually morphed into a more substantive trade deal," the official said. "And it will be built on. ... We've done the Oval Office, now we've got more serious work to do."
Trump's first trade deal fuelled a rally on Wall Street, sending major US indexes briefly up over 1%. The S&P 500 passenger airlines index closed up 5.4%, led by a 7.2% surge in Delta Air Lines as US Commerce Secretary Howard Lutnick said British-made Rolls-Royce engines would enter the US duty-free.
Trump's administration has been under pressure from investors to strike deals and de-escalate its tariff war after the US president's often chaotic policymaking upended global trade with friends and foe alike, threatening to stoke inflation and tip the global and US economies into recession.
Lutnick told CNBC on Thursday that Washington will roll out dozens of trade deals over the next month.
Trump's biggest challenge, however, is resolving a virtual trade embargo between the US and China, with tariffs of 145% and 125%, respectively on each side. Greer and Bessent will lead talks with Chinese officials in Switzerland, on Saturday and Sunday. Trump said the talks would be substantive - more than an ice-breaker - and predicted the tariffs would come down.
WARM RELATIONSHIP, SOME DISAPPOINTMENT
The British-American Business group expressed disappointment that the deal leaves in place Trump's 10% tariffs for many products, including cars, raising costs for UK exporters. It said it hoped that the deal would be a start of deeper US-UK trade integration including the digital economy.
The deal will provide potential new export opportunities for American producers worth $US5 billion a year, Lutnick said, while the higher tariffs would generate $US6 billion in annual US revenue.
It will reduce US tariffs on British auto imports to 10% from the current 27.5%, according to a UK statement. The lower rate will apply to a quota of 100,000 British vehicles, almost the total exported to the US last year.
US tariffs on imports from the struggling UK steel industry will fall to zero from 25%, while Britain's 19% tariffs on US ethanol will fall to zero through a 1.4 billion-litre quota that far exceeds US exports last to the UK last year.
Both sides have agreed to new reciprocal market access on beef, with UK farmers given a first-ever tariff-free quota for 13,000 metric tonnes.
There will be no weakening of UK food standards on imports, despite repeated entreaties by the US side.
Crucially there will be no weakening of UK food standards on US beef imports, which was an election manifesto pledge for the Labour government. That means US beef bred with growth hormones still won't be allowed in.
US Agriculture Secretary Brooke Rollins said the deal would "exponentially increase" US beef exports to Britain.
But much depends on whether American beef could compete with the British beef on price and find favor with British consumers.
Currently 100% of the fresh beef sold by Britain's two biggest supermarket chains Tesco and Sainsbury's is British and Irish.
Details were scant on tariffs on UK pharmaceuticals imports, which could damage AstraZeneca and GSK, although a White House fact sheet said the deal would create a secure pharma supply chain.
The US agreed to give Britain preferential treatment in any further tariffs imposed under Section 232 national security investigations, which include ongoing probes of pharmaceutical and semiconductor imports. GSK and AstraZeneca declined comment.
In addition to assurances "future-proofing" Britain from additional sectoral tariffs, the UK official also welcomed Trump's assurance during the Oval Office event on finding ways to avoid his new push to tariff foreign-made movies.
Starmer's government has been seeking to build new trading relationships post-Brexit with the US, China and the EU without moving so far towards one bloc that it angers the others.
With the British economy struggling to grow, the tariffs had added to the pressure on his government.
Jaguar Land Rover TAMO paused its shipments to the US for a month and the government was forced to seize control of British Steel to keep it operating.
Economists and one FTSE 100 chief executive said the immediate economic impact of a tariff deal was likely to be limited, but that trade agreements in general would help long-term growth. Britain struck a free trade agreement with India this week.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Eleven dead in Austria school shooting; World Bank cuts forecast
Eleven dead in Austria school shooting; World Bank cuts forecast

National Business Review

timean hour ago

  • National Business Review

Eleven dead in Austria school shooting; World Bank cuts forecast

Happy Wednesday and welcome to your wrap of the top news stories from around the world. First up, a school shooting in the Austrian city of Graz has left 11 people dead, including the shooter. The BBC is reporting that the incident took place at around 10am local time, with seven women and three men among the dead. The 21-year-old suspect, who is a former pupil who did not graduate from the high school, is believed to have killed himself. Austria's Chancellor Christian Stocker has declared three days of national mourning, which will begin tomorrow. He said today is a 'dark day in [the] history of our country' and called the shooting a national tragedy. Christian Stocker (Source: Wikimedia Commons) To London now, where high-level trade talks between the United States and China have pushed through their second full day. According to Reuters, a US Treasury spokesperson told reporters that talks had paused and would resume at 8pm local time. No details about what was discussed were revealed, although earlier in the day, US Commerce Secretary Howard Lutnick said discussions with his Chinese counterparts were 'going well'. Chinese exports of rare earth minerals crucial for technology components, as well as China's access to US computer chips, were expected to be high on the agenda. Last month, both countries scaled back their hefty reciprocal trade tariffs but accused each other of breaching the deal. Last week, Donald Trump and Chinese President Xi Jinping spoke by phone and agreed to resolve tariff disputes. Trump acknowledged the trade relationship with China had got 'a little off track'. New Zealand has joined Australia, Canada, the United Kingdom and Norway in imposing sanctions on two far-right Israeli politicians for their comments about the war in Gaza. The joint action against Israel's Finance Minister Bezalel Smotrich and National Security Minister Itamar Ben-Gvir was announced earlier this morning. Bezalel Smotrich. (Source: Wikimedia Commons) New Zealand Foreign Minister Winston Peters said the two men were targeted, rather than the Israeli government, because they were using their leadership positions to 'actively undermine peace and security and remove prospects for a two-state solution', according to RNZ. "Ministers Smotrich and Ben-Gvir have severely and deliberately undermined that by personally advocating for the annexation of Palestinian land and the expansion of illegal settlements, while inciting violence and forced displacement," he said. The two men will be banned from entering New Zealand, as well as the other four countries. The BBC also reports that any assets they have in the UK will be frozen. In response, Israel has said it was 'outrageous that elected representatives and members of the government are subjected to these kinds of measures'. In business news, CNBC reports that the World Bank has slashed its global growth forecast due to the disruption caused by trade uncertainty. It now expects the global economy to expand by 2.3% in 2025, down from its prior forecast of 2.7%. 'This would mark the slowest rate of global growth since 2008, aside from outright global recessions,' the bank said in its Global Economic Prospects report. The bank said trade uncertainty had weighed on the outlook and upended many of the policies that helped shrink global poverty and expand prosperity after the end of World War II. 'Our analysis suggests that if today's trade disputes were resolved with agreements that halve tariffs relative to their levels in late May 2025, global growth could be stronger by about 0.2 percentage points on average over the course of 2025 and 2026,' World Bank chief economist Indermit Gill said. The World Bank building in Washington. Finally, in market news, Wall Street's main indices were up in afternoon trading. The Dow Jones Industrial Complex, the broader S&P 500 and the tech-heavy Nasdaq were all between 0.2% and 0.6% higher. Reuters reports that markets are awaiting the results of the US-China trade talks, with investors betting on improved trade terms after a preliminary deal was struck last month. "The expectation is that they'll figure this out, and that the Liberation Day tariff levels are never going to be seen. You can't get to market valuations where we've got them and have those tariff levels get anywhere close to reality," Horizon Investments chief investment officer Scott Ladner told Reuters.

An unrestrained Trump defends deploying military to Los Angeles during Fort Bragg visit
An unrestrained Trump defends deploying military to Los Angeles during Fort Bragg visit

RNZ News

time2 hours ago

  • RNZ News

An unrestrained Trump defends deploying military to Los Angeles during Fort Bragg visit

By Kevin Liptak and Alayna Treene , CNN Photo: BRENDAN SMIALOWSKI When President Donald Trump returned from a Bastille Day visit to Paris during his first term, he asked his military brass to organize a parade akin to the one he'd watched march down the Champs-Élysées. His defense secretary at the time, James Mattis, said he'd rather "swallow acid," according to a book written by a former staffer. Trump later received a comparable response from another defense secretary, Mark Esper, when he floated using active duty troops on American soil to quell violent protests. "The option to use active duty forces in a law enforcement role should only be used as a matter of last resort, and only in the most urgent and dire of situations," Esper told reporters in 2020. Times have changed. "We will use every asset at our disposal to quell the violence and restore law and order right away," Trump said on Tuesday during a visit to Fort Bragg, North Carolina, where he defended sending the National Guard and the Marines to Los Angeles . "We're not going … to wait for a governor that's never going to call and watch cities burn," he added. Free of advisers who acted as guardrails to his most extreme impulses, and more determined than ever to demonstrate strength, Trump has reshaped how a president uses the US military during his second term in office. This week's troop deployments in Los Angeles , which come ahead of a major military parade through Washington, DC, on Saturday, illustrate just how much the restraints once placed on Trump's use of US servicemen and women have evaporated. No longer does Trump appear convinced, as he did in 2020, that activating a state's National Guard troops against the wishes of governors is against the law. Nor does he seem particularly bothered by the view of some former military leaders, who told him during his first term that major military parades are the purview of dictators, not democratically elected leaders. Some former military officials, along with some current officials speaking privately, have voiced concern about the juxtaposition of tanks parading through Washington potentially at the same moment US troops are deployed on California streets. "For me, it's a negative split screen moment," retired Adm. James Stavridis, the former NATO supreme allied commander, told "CNN This Morning." "You're doing this pretty unusual visual of tanks rolling through our capital, and across the country in Los Angeles, you're putting US Marines - the best combat shock troops in the world… they're being deployed against largely peaceful protesters," he said. "I think that's a troubling split screen. It will be difficult, appropriately difficult for the American people to digest what they're looking at." Trump heralded the weekend spectacle in front of a sympathetic crowd on Tuesday. "And Saturday is going to be a big day in Washington, DC, and a lot of people say we don't want to do that. We do. We want to show off a little bit," he told service members and their families. The event was arranged like a typical political-style rally, albeit comprised of hundreds of uniformed troops, military families and others, some of whom booed in agreement when Trump criticized former President Joe Biden. Upon entering the event site, attendees were greeted with the sight of military tanks and fighter vehicles spread out across the large field as part of a demonstration of the Army's capabilities - known as a static display, members of the Army on the ground told CNN. An Avenger Stinger missile vehicle, Sentinel radar and different types of Army tanks were included in the display. When he arrived, Trump watched demonstrations of special operators and paratroopers. In interviews with CNN, several members of the military in the crowd showed appreciation for the president's visit and dismissed concerns that he's overstepped in ordering the National Guard and US Marines to Los Angeles to respond to the protests in the city without request from the governor - an action that's without recent precedent. George Ahouman, a mechanic specialist in the Army's 91 Bravos group, told CNN of the move: "It's always a tough decision to make. We have to do what we have to do regardless, you know. So if the bad guy is acting bad, we gotta, you know, knuckle down and do what we're supposed to, that's what we signed up for." Toby Cash, in the same division as Ahouman, said: "It's a tough topic to talk about. At the end of the day we've just got to follow orders." Ahouman added, however, that he's grateful Trump came to visit Fort Bragg and will hold a parade to honor the Army's 250th anniversary. "I feel like he's kind of showing his love to the troops and to the Army. You know, we usually don't get recognition like that in the past, so I think it's pretty good." Will Schmidt and Raymond Cervantes, both members of the Army's 57th Sapper company in the 27th engineer battalion, made similar arguments. "Personally, I'm in support of it," Schmidt told CNN of Trump's decision to deploy troops to Los Angeles. "It's kind of like one of the reasons we have a National Guard, and a lot of it is disaster relief, but it's also civil unrest and stuff." Cervantes argued the president's visit to the Army base - which serves as headquarters for US Army Special Operations Command, where Green Berets and the Rangers are based - and his plans to host a military parade in Washington, "shows he cares." "Even for those who don't like him as an individual, he's still showing he appreciates us," Cervantes said. Fort Bragg itself has come to embody some of the ways Trump is working to move the military away from what he views as the liberal excesses of the previous administration. Originally named for Braxton Bragg, a Confederate general, it was renamed to Fort Liberty in 2023 amid a push to strip names of Confederate leaders from military installations. But Trump's administration reversed the decision, restoring the Fort Bragg name earlier this year - but now citing World War II paratrooper Roland Bragg as the namesake. On Tuesday, Trump announced his administration would be changing back the names of several other bases originally named after Confederates. Photo: BRENDAN SMIALOWSKI Trump's visit to Fort Bragg was intended as a kickoff to a week of celebrations marking the US Army's 250th birthday, which will culminate in Saturday's parade in Washington. That event will see a massive amount of military hardware and personnel being paraded through Washington, including 28 Abrams tanks weighing 70 tons each rolling down Constitution Avenue. Local officials have voiced concern about potential damage to the city's streets, which could cost millions of dollars to repair. Military officials have downplayed the cost of the parade, which is also set to include a World War II-era B-25 bomber, 6,700 soldiers, 50 helicopters, 34 horses, two mules and one dog. But even some Republicans have expressed skepticism about the parade. "Well, look, it's the president's call. I wouldn't spend the money if it were me," Louisiana Sen. John Kennedy said when asked about the event. "The United States of America is the most powerful country in all of human history. We're a lion. And a lion doesn't have to tell you it's a lion. Everybody else in the jungle knows," he said. Unlike his predecessors during Trump's first term, Defense Secretary Pete Hegseth has demonstrated only enthusiasm for Trump's parade plans. Nor has Hegseth voiced any misgivings over Trump's decision to deploy National Guard troops and active-duty Marines to Los Angeles over the objections of California's Democratic leaders. Photo: BRENDAN SMIALOWSKI Trump has long mused about using military force to clamp down on protests or riots in the United States, including during his first term as violence broke out following the killing of George Floyd in 2020. His aides drafted a proclamation that would send thousands of active duty troops using the Insurrection Act, but top advisers at the time - including Esper, Attorney General Bill Barr and Joint Chiefs of Staff chairman Mark Milley - encouraged him against taking that step. Trump appeared in 2020 to have been persuaded that activating the National Guard without a governor's request would be illegal. "Look, we have laws. We have to go by the laws," Trump said during an ABC town hall at the time. "We can't move in the National Guard. I can call insurrection, but there's no reason to ever do that." "We can't call in the National Guard unless we're requested by a governor," Trump went on to explain. Trump later came to regret following that advice. "You have to remember, I've been here before, and I went right by every rule," he said Tuesday before departing the White House for Fort Bragg. "And I waited for governors to say, send in the National Guard. They wouldn't do it. They wouldn't do and they just wouldn't do it. It kept going on and on." - CNN

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store