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Reuters
2 days ago
- Business
- Reuters
British exports to US suffer record hit from Trump tariffs
LONDON, June 12 (Reuters) - British goods exports to the United States suffered a record fall in April after U.S. President Donald Trump imposed new tariffs, official figures showed on Thursday, pushing Britain's goods trade deficit to its widest in more than three years. Britain exported 4.1 billion pounds ($5.6 billion) of goods to the United States in April, down from 6.1 billion pounds in March, Britain's Office for National Statistics said, the lowest amount since February 2022 and the sharpest decline since monthly records began in 1997. The 2 billion pound fall - a 33% drop in percentage terms - contributed to a bigger-than-expected drop in British gross domestic product in April. Last week Germany said its exports to the United States fell by 10.5% in April although that figure, unlike Britain's, is seasonally adjusted. The British Chambers of Commerce said the scale of the fall partly reflected manufacturers shipping extra goods in March to avoid an expected increase in tariffs. Even so, April's goods exports were 15% lower than a year earlier. "The economic effects of the U.S. tariffs are now a reality. Thousands of UK exporters are dealing with lower orders and higher supply chain and customer costs," the BCC's head of trade policy, William Bain, said. The United States is Britain's largest single goods export destination and is especially important for car makers, although total British exports to countries in the European Union are higher. Britain exported 59.3 billion pounds of goods to the United States last year and imported 57.1 billion pounds. The United States imposed 25% tariffs on British steel and aluminium on March 12 and in early April increased tariffs on imports of cars to 27.5% as well as a blanket tariff of 10% on other goods. Last month Britain agreed the outline of a deal to remove the extra tariffs on steel, aluminium and cars - the only country to do so - but it has yet to be implemented and the 10% tariff remains in place for other goods. Before the deal, the Bank of England estimated the impact of the tariffs on Britain would be relatively modest, reducing economic output by 0.3% in three years' time. Thursday's data also showed that the fall in exports to the United States pushed Britain's global goods trade deficit to 23.2 billion pounds in April from 19.9 billion pounds in March, its widest since January 2022 and nearly 3 billion pounds more than had been expected by economists polled by Reuters. Excluding trade in precious metals, which the ONS says adds volatility to the data, the goods trade deficit was the widest since May 2023 at 21.6 billion pounds. Britain's total trade deficit narrowed to 5.4 billion pounds in April - also the widest since May 2023 - once the country's surplus in services exports is taken into account. ($1 = 0.7364 pounds)
The Independent
04-06-2025
- Business
- The Independent
Deal on US steel tariffs to be in force ‘in a very short time', says PM
The US trade deal will be implemented 'within a very short time', the Prime Minister has said after Donald Trump exempted Britain from a hike in steel tariffs. Sir Keir Starmer suggested to the House of Commons on Wednesday that the deal struck last month could come into effect 'in just a couple of weeks'. Once implemented, the agreement would effectively eliminate tariffs on British steel and aluminium exports to the US. Those tariffs currently stand at 25% after Mr Trump said he would 'provide different treatment' for the UK while he increased the levy to 50% for the rest of the world. But the situation could still change again in July, when the US is set to either increase the tariffs to 50% or introduce the quotas in the US-UK agreement, effectively eradicating the tax, depending on whether the deal is implemented. Challenged over the uncertainty during Prime Minister's Questions by Conservative leader Kemi Badenoch, Sir Keir said: 'We are the only country in the world that isn't paying the 50% tax on steel and that will be coming down. 'We are working on it to bring it down to zero, that is going to happen.' Responding to further questions from Liberal Democrat leader Sir Ed Davey, Sir Keir told MPs: 'We have a deal and we are implementing it and within a very short time I am confident we will get those tariffs down in accordance with the deal.' Adding that he expected MPs would be 'very pleased at the outcome of that', he said: 'Let's come back in just a couple of weeks when we have implemented it.' After Prime Minister's Questions, Downing Street said Sir Keir's confidence in finalising the deal was due to 'constant dialogue' with the US. But the Prime Minister's official spokesman would not guarantee that the deal would be in place by the July 9 deadline set by Mr Trump, telling reporters: 'Obviously our aim is to implement this deal as quickly as possible and you have just heard from the PM in the House that we are hoping to provide an update on that in weeks.' Earlier on Wednesday, Transport Secretary Heidi Alexander told the BBC the Government would bring forward the legislation needed to implement the deal. Meanwhile, both the steel industry and trade unions have urged the Government to finalise the agreement with Washington. Gareth Stace, head of the industry body UK Steel, said Mr Trump's decision to keep tariffs on British steel at 25% was a 'welcome pause' but warned that continuing uncertainty was making US customers 'dubious over whether they should even risk making UK orders'. Alasdair McDiarmid, assistant general secretary of the Community union, also welcomed the 'reprieve' from the 50% rate, and added it was 'vital that the UK locks down the US trade deal to avoid punitive steel tariffs going forward.' But the Lib Dems urged Sir Keir to stand up to Mr Trump, saying the president had changed the terms of a deal he had already signed. Following Prime Minister's Questions, Sir Ed called on the Government to support his party's 'Buy British' campaign, saying: 'Donald Trump has taken our lunch money and is now coming back for more. 'Any deal he signs is already through the Oval Office shredder. 'It is time for the Government to admit that Trump's White House is not a reliable ally and get tough on ending this trade war by backing British businesses.' The Conservatives have said that Labour's 'botched negotiations have left businesses in limbo'. Shadow business and trade secretary Andrew Griffith said: 'Keir Starmer stood in front of the nation and insisted to the British public that his Labour Government had achieved a trade deal with the US – and now one month later our industries face a fresh tariffs blow. 'So once again it seems that Keir Starmer's promise was just like the rest: hollow and broken. Labour's botched negotiations have left businesses in limbo and this country simply cannot afford their continuing failure.'
Yahoo
17-05-2025
- Business
- Yahoo
The UK-US trade deal: what was agreed?
When you buy through links on our articles, Future and its syndication partners may earn a commission. Washington and London hailed a "historic" agreement last week after the UK became the first country to seal a deal with President Trump since he launched his global trade war. The deal cut US tariffs on British car exports from 27.5% to 10%, and removed all levies on British steel, aluminium and Rolls-Royce engines. In exchange, the UK offered greater market access to US agricultural exports, including beef and corn ethanol, although it retained its ban on chlorine-washed chicken and hormone-treated beef. Trump announced the deal in a televised event in the Oval Office, flanked by Britain's US ambassador, Peter Mandelson; Keir Starmer joined by speakerphone. No. 10 later described it as a "win for both nations" and promised to build on it. Kemi Badenoch, the Tory leader, said Britain had been "shafted", noting that the deal provides less-favourable trading terms than we had before Trump's "liberation day". Starmer should be congratulated for this deal, which has saved thousands of British jobs, said The Independent. His calm, non-confrontational approach to Trump has paid off. The PM did well to get the UK to the front of the queue, agreed The Times. The fact remains, though, that this is more of a "damage limitation exercise" than "an unbridled triumph". Most UK goods still face a blanket 10% tariff. And the lower levy on British cars only applies to a quota of 100,000, which matches our current level of exports to the US, effectively placing "a ceiling on future sales". Much remains to be hammered out, said the Daily Mail. There's still no clarity over pharmaceuticals, for instance, or Trump's threatened film tariffs. The worry is that Starmer will scupper further progress in his "desperation to reset relations with the EU", whose leaders he is meeting next week. Reducing friction with the EU, our largest trading partner, is the key to boosting our economic growth, said the FT. Compared with this, the deal with the US, like the earlier one with India, is "little more than a sideshow".
Daily Mail
09-05-2025
- Business
- Daily Mail
Starmer's trade deal with the US 'only covers a quarter of UK exports' as huge pharma sector is left in limbo - with film industry still under threat and Trump 'targeting tax on tech firms'
Brits are digesting the impact of Keir Starmer 's trade deal with the US today as figures show it only covers around a quarter of UK exports. The pact theatrically announced by the PM and US president last night will cut tariffs from 25 per cent to 10 per cent for the first 100,000 cars sent to America. Levies on steel exports will also be slashed from 25 per cent to zero, in return for concessions such as cutting tariffs on US cars and farmers getting more access to British markets. In a round of interviews this morning, Treasury minister Darren Jones insisted 150,000 workers would be 'relieved' that their jobs were no longer at risk. However, the pact still leaves tariffs higher than before Mr Trump kicked off his extraordinary trade war. Analysis by Sky News suggests that of the £273billion of exports to the States over the past five years, barely a quarter would be affected by the agreement - with the rest facing the 10 per cent 'baseline' charge. That also assumes the critical pharma sector, accounting for £25.2billion of the total over the period, secures an exemption from Mr Trump's next wave of tariffs - which appears far from certain. The agreement did not include any provision for the UK film industry, after the president threatened 100 per cent levies on foreign-made movies. And the US does not appear to have given up on a push to help tech giants by watering down the Digital Service Tax. Mr Jones told the BBC on the absence of terms on pharma and films: 'The nothing is good news... those tariffs have not come forward.' In other developments today: British Airways' parent company has announced it is buying 32 new Boeing planes from the US, in a move that was flagged by the US Commerce Secretary last night; Bank of England governor Andrew Bailey has insisted the UK must now 'rebuild' trade relations with the EU, amid Tory warnings over Sir Keir's Brexit 'reset'; Ministers have denied that Mr Trump has been handed a 'veto' over Chinese investment in UK; Keir Starmer went to the JLR plant in Solihull to announce the agreement yesterday The deal was the first struck by the US since Mr Trump's so-called 'Liberation Day' tariffs stunned the world. Ministers had feared that leading car makers were preparing to cut thousands of jobs unless the tariffs were reduced. Sources said Jaguar Land Rover had been poised to announce 'hundreds' of job losses as early as next week. Challenged that the UK was in a worse place than before Mr Trump imposed sweeping tariffs, the Mr Jones told Times Radio: 'The counterfactual is the world that we live in, not the world that we would like it to be. In relation to the world that we live in, this is a really good deal for Britain. 'We are the first country in the world to be able to negotiate an agreement with the President of the United States to move away from those increased tariffs on global trade. 'And that's something to be celebrated for the UK economy and for workers that work in those sectors.' Mr Jones told the BBC: 'If I could rather be in a world where there were no tariffs, of course I would. But that's just not the world that exists. So it's not really an option on the table. The option on the table is to have not signed a trade deal with the United States and had higher tariffs, or to have signed a trade deal with the United States and had lower tariffs. 'We've signed that trade deal. We've got lower tariffs in critical manufacturing sectors in the UK. 150,000 people's livelihoods that we've protected as a consequence of that trade deal. That is, by definition, factually better off as a consequence of the action that this Government is taking to stand up for working people across the UK.' Mr Trump said the speed of the deal with the UK was only possible because of Britain's status outside the EU. And he hinted that rival car manufacturers in EU countries such as Germany are very unlikely to get a similar deal. Boris Johnson last night hailed the importance of Brexit in sealing the deal – and highlighted the irony that Sir Keir was 'reaping the dividends of that policy, which he, of course, singularly failed to support at the time'. Ministers failed to make any progress on reducing the 10 per cent 'baseline' tariff on all exports to the US. Britain also seemingly agreed to prevent cheap Chinese steel and pharmaceuticals being routed through the UK to America as a 'security of supply' measure. The White House said that, compared to the position before Liberation Day, overall US tariffs on British goods had still risen from 3.4 per cent to 10 per cent, while Sir Keir had agreed to cut tariffs on US goods from 5.1 per cent to 1.8. Kemi Badenoch said Britain had been 'shafted' by the deal. ''We cut our tariffs – America tripled theirs,' she said. Other Tories criticised the agreement for not going far enough. Shadow business secretary Andrew Griffith told BBC Radio 4's Today programme: 'There's some good elements to yesterday's deal – I think car industry and steel industry will welcome at least the reduction. But overall, it's quite disappointing. 'It's still very unclear what happens to pharmaceuticals, a really big UK industry, there's nothing on film and TV, and yet (at) the start of the week, the Government was talking about 100 per cent tariffs on that. 'It's not a trade agreement in the classic sense.' Mr Griffith said the deal did not offer any mutual recognition between the US and UK and urged the Government to get back round the table with its counterparts to negotiate 'a comprehensive agreement'. But the PM said: 'The question we should be asking is, is it a better position than we were in yesterday?' He claimed the breakthrough vindicated his emollient approach to Mr Trump, adding: 'My government has put Britain at the front of the queue because we want to work constructively with allies.' Government sources acknowledged the deal falls short of a hoped-for agreement on lifting all US tariffs, but said ministers decided to press ahead with a partial deal now to prevent redundancies in the car industry. Business secretary Jonathan Reynolds said the 'significance of the US market' to high-end exporters such as JLR, Aston Martin and Bentley meant the UK was facing the 'imminent announcement' of job losses if the 25 per cent tariff had remained.
Malay Mail
09-05-2025
- Business
- Malay Mail
Trump, Starmer hail ‘historic' US-UK trade deal, but 10pc tariffs on British exports remain unchanged
Starmer says 'historic' deal to expand US-UK trade Deal opens 'a tremendous market' for the US — Trump Deal is first since Trump launched global tariff war Baseline 10 per cent tariff on UK goods to remain, Trump says WASHINGTON, May 9 — US President Donald Trump and British Prime Minister Keir Starmer yesterday announced a limited bilateral trade agreement that leaves in place Trump's 10 per cent 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 US$1.2 trillion (RM5.1 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 UK 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 per cent 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 per cent 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 per cent from 5.1 per cent but keeps in place a 10 per cent 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 per cent 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 per cent. The S&P 500 passenger airlines index closed up 5.4 per cent, led by a 7.2 per cent surge in Delta Air Lines (DAL.N) 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 yesterday 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 per cent and 125 per cent, 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. Britain's Prime Minister Keir Starmer speaks on the phone to US President Donal Trump at a car factory in the West Midlands May 8, 2025. — Alberto Pezzali/Pool/Reuters pic Warm relationship, some disappointment The British-American Business group expressed disappointment that the deal leaves in place Trump's 10 per cent 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 US$5 billion a year, Lutnick said, while the higher tariffs would generate US$6 billion in annual US revenue. It will reduce US tariffs on British auto imports to 10 per cent from the current 27.5 per cent, 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 per cent, while Britain's 19 per cent tariffs on US ethanol will fall to zero through a 1.4 billion-litre (370 million gallon) 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 favour with British consumers. Currently 100 per cent 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 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. — Reuters
