President Trump and UK Prime Minster Keir Starmer announced on Thursday morning that the two countries have agreed on a trade deal, although many of the details are yet to be finalized. The agreement, which focuses on tariff relief from some U.S. duties for the U.K. and increased market access for U.S. goods, notably leaves in place the 10% reciprocal tariff on most imports from the U.K.
The initial announcement focused on tariff relief for the U.K. on steel, aluminum, and automotives, while President Trump touted likely benefits in the U.S. beef, ethanol, chemicals, and machinery sectors. A subsequent statement from the U.K. government and fact sheet from the White House provided additional information, although many details remain to be negotiated.
Under the new deal, the U.K. may import up to 100,000 cars per year free from the 27.5% duty on autos – a number which the British government’s statement indicated was close to the entire quantity exported in 2024. The U.K. will also get reprieve from steel tariffs – although the details remain unclear. The U.K. states that the country will have access to a zero-tariff quota, while the White House fact sheet stated only that the two countries would “negotiate an alternative arrangement to the Section 232 tariffs on steel and aluminum.”
The agreement also includes reciprocal market access for beef products, with U.S. Agriculture Secretary Brooke Rollins stating in the Oval Office press conference that the deal would “exponentially” boost U.S. beef exports, and the White House fact sheet indicating that the two countries were committed to “work together to enhance industrial and agricultural market access.” The U.K. also stated that the country would remove its tariff on ethanol, which Secretary Rollins also emphasized in her remarks.
The White House also indicated that the deal included the establishment of “a secure supply chain for pharmaceutical products,” although details were not forthcoming, and the U.K. statement merely provided that work on pharmaceuticals and remaining reciprocal tariffs would continue.
Notably, the 10% base tariff rate put in place by the U.S. on U.K. imports remains in place, with President Trump indicating the baseline rate was “pretty much set,” while the U.K.’s digital services tax also remains in place. While the Trump Administration has indicated that the U.K. deal is only the first in a “series of agreements on trade,” the fact that the baseline 10% rate remains in place suggests it may be difficult for other countries to reach agreements to bring tariffs below pre-Liberation Day levels.
The eyes of the trade world turn to Geneva, Switzerland as U.S. and Chinese officials meet for initial discussions.
