Bespoke US trade deal with Britain offers few clues for others

US President Donald Trump made a deal. Now comes the hard part: getting more.

US President Donald Trump announces the trade deal with Britain. Picture: AP

US President Donald Trump made a deal. Now comes the hard part: getting more.

Mr Trump agreed to a framework for a trade agreement with the UK, giving his administration momentum as it faces pressure to notch scores more to avoid hurting American consumers. But the deal was limited in scope and included niche issues regarding the UK, meaning it didn’t offer other nations a clear road map to follow, foreign officials said.

Many other deals weren’t seen as likely to come together so easily. The UK was low-hanging fruit, given the US enjoys a goods trade surplus with the country, unlike with China, America’s third-largest trading partner for goods in 2024. Imports from China are currently subject to a 145 per cent levy. In a sign of how eager Mr Trump was for a win in the trade conflicts, he called UK Prime Minister Keir Starmer late on Wednesday (Thursday AEDT) to finalise the details. Sir Keir was watching his favourite football team, Arsenal, play at the time.

“They are keen to show they are making progress,” said Myron Brilliant, a senior counsellor at DGA Group. “These are signals to the market. It’s better to have a step forward than a step back. But they are going to have to demonstrate these deals are going to end up with sustaining commitments on both sides.”

While analysts questioned the significance of the deal, Mr Trump, who has shown frustration with questions over his trade agenda and the global turbulence it has created, cast it as historic. His team said the deal would unlock billions of dollars for US exporters.

The Trump administration agreed to roll back tariffs imposed on British steel and cars in ­exchange for the UK purchasing Boeing jets and giving American farmers greater access to UK markets. The US also agreed to allow Rolls-Royce jet engines and parts to be imported tariff-free.

Mr Trump expressed confidence in reaching agreements with other countries, notably China. The President, though, showed no sign of backing entirely away from his tariff agenda as he seeks to rebalance global trade.

“One lesson from the US-UK announcement is that all of America’s trading partners are likely to face at minimum a 10 per cent tariff,” said National Foreign Trade Council president Jake Colvin. “That alone would result in a permanent fourfold increase from the average US tariff of 2.4 per cent in 2024, which is a scenario that was nearly unthinkable just a year ago.” The nature of the UK agreement shows how Mr Trump is willing to bypass traditional trade pacts that can take several years to hammer out. The move also highlighted the soft power of the UK; Mr Trump is an Anglophile who has in the past said he thought a deal could be worked out.

Foreign partners generally viewed the news as positive but didn’t see how its contours directly applied to their own talks, officials said. Mr Trump is dispatching Treasury Secretary Scott Bessent to Switzerland this weekend for high-stakes talks with officials from China. The two nations have effectively closed trading through massive retaliatory tariffs.

For Chinese officials, what’s notable in the limited deal Mr Trump struck with the UK is that it doesn’t appear to have any details about the two countries aligning to isolate China – a stated goal by Trump advisers.

The lack of such details, at least for now, is likely to bolster China’s position as senior officials meet in Switzerland. Meanwhile, even though Mr Trump said he expects the US-China meeting to be “substantive”, Beijing is treating it largely as an opportunity to present its position and gauge the ­administration’s intentions. In particular, Chinese officials view it as a chance to figure out whether the Trump administration – and Mr Trump himself – intend to pursue a deal that could help put the brakes on the current trend of decoupling between the US and China. If those talks with China go well, Mr Trump suggested the tariffs could come down. “Right now you can’t get any higher. It’s at 145 per cent so we know it’s coming down,” he said.

A European Union diplomat said it could be helpful to get a sense from the UK of what worked in negotiating with the US But the diplomat added the UK market is much smaller than the EU’s and is more unified compared with the bloc’s 27 member states.

A spokeswoman for Canadian Prime Minister Mark Carney, who met Mr Trump this week, didn’t respond to a request for comment on the implications of the US-UK framework. Bank of Nova Scotia economist Derek Holt said the US runs a goods trade surplus with the UK, and hence hasn’t found itself “in the same crosshairs of the Trump ­administration as other countries”, such as Canada.

Mark Warner, a trade lawyer who works in Toronto and the US, said Canada faced a tougher haul because of the range of issues outstanding, such as cars, dairy production, and Canada’s digital services tax. Plus, he said, Mr Carney “has adopted a more contentious approach to trade negotiations with a lot of red lines and no evident openings for compromise in a minority parliament”. The US is also engaged with a range of other nations, including India and Japan.

Juan Carlos Baker, who was Mexico’s deputy trade minister during the negotiations for the US-Mexico-Canada agreement signed in late 2018, said the deal with the UK was in no way comparable to the deeper trade relationship the US had with Mexico.

Mexico shipped almost three million vehicles to the US and supplied 40 per cent of US auto parts last year.

A coming review of the USMCA is more complex and negotiations could extend for years, Mr Baker said. “Even with the best will, such an agreement doesn’t come out overnight,” he said.

In the initial aftermath of the April 2 “Liberation Day” tariffs announcement and the subsequent 90-day pause, Mr Trump and top administration officials predicted a wave of deals. Mr Trump in recent days has expressed frustration with questions on when deals will land. “We don’t have to sign deals, they have to sign deals with us,” he said.

Additional reporting: Paul Vieira