Trump heralds ‘breakthrough' deal with UK
LONDON/WASHINGTON: US President Donald Trump and British Prime Minister Keir Starmer on Thursday announced a 'breakthrough deal' on trade that leaves in place a 10% tariff on goods imported from the UK while Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to US goods.
The agreement announced by Trump from the Oval Office marked the first since Trump triggered a global trade war with a barrage of levies on trading partners following his return to the White House in January.
'It opens up a tremendous market for us,' Trump said.
'This is a really fantastic, historic day,' Starmer said by teleconference.
The United States has been under pressure from investors to strike deals to de-escalate its tariff war after Trump's often chaotic policymaking upended global trade with friends and foe alike, threatening to stoke inflation and start a recession.
Top US officials have engaged in a flurry of meetings with trading partners since the president on April 2 imposed a 10% tariff on most countries, along with higher rates for many trading partners that were then suspended for 90 days.
The US has also imposed 25% tariffs on autos, steel and aluminium, 25% tariffs on Canada and Mexico, and 145% tariffs on China. US and Chinese officials are due to hold talks in Switzerland on Saturday.
WARM RELATIONSHIP
With the British economy struggling to grow, the tariffs had added to the pressure on his government.
Jaguar Land Rover paused its shipments to the US for a month and the government was forced to seize control of British Steel to keep it operating.
The deal 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 British tariffs on US ethanol will fall to zero from 19%.
Both sides have agreed new reciprocal market access on beef – with UK farmers given a tariff-free quota for 13,000 metric tonnes. There will be no weakening of UK food standards on imports.
Commerce Secretary Howard Lutnick said that Britain is expected to announce a purchase of $10 billion worth of US-assembled
Boeing aircraft
, although a White House graphic referred to 'aircraft parts.' In turn, Lutnick said that the US will allow duty-free imports fo Rolls-Royce RR.L jet engines.
Lutnick said that the deal would create $5 billion in new annual export opportunities for American producers, while the new tariffs that stay in place would produce $6 billion in annual new US revenue.
While seeking a deal with the US, Britain had refused to lower its food standards, which are closely aligned with the European Union. However, Britain's farming trade union has said that some US producers who do not use growth hormones or antimicrobial washes could be given greater market access.
Trump said the 10% 'baseline' tariff would stay in place and that other countries may face higher reciprocal tariffs even as they negotiate similar trade deals with the US 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.
Initial news of an announcement sent shares in luxury carmaker Aston Martin up 10%, while British retailers with operations in the US, including JD Sports and Primark owner AB Foods, also rose.
TRADE TIGHTROPE
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.
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