Trump unveils UK trade deal, first since tariff blitz

Trump unveils UK trade deal, first since tariff blitz

US President Donald Trump makes a trade announcement as US Secretary of Commerce Howard Lutnick (2L), US Vice President JD Vance (3L), British ambassador to the United States Peter Mandelson (3R), US Trade Representative Jamieson Greer (3R) and US Secretary of Agriculture Brooke Rollins (R) look on in the Oval Office of the White House in Washington, DC, on May 8, 2025. US President Donald Trump on announced a "full and comprehensive" trade agreement with Britain, which would be the first such deal since he launched his global tariffs blitz.

US President Donald Trump and British Prime Minister Keir Starmer unveiled a "historic" trade agreement Thursday, Trump's first deal with any country since he unleashed a blitz of sweeping global tariffs.

The deal will see Washington lower tariffs on British luxury cars and lifts them entirely on steel and aluminum, although a 10 percent baseline levy on British goods stays in place.

As Trump announced the deal while making a phone call to Starmer in the Oval Office, he said Britain would in return will open up markets to US beef and other farm products.

But the deal remained thin on details, despite Trump hailing it as a template for deals with other countries such as China after his "Liberation Day" tariffs in April.

"I'm thrilled to announce that we have reached a breakthrough trade deal with the United Kingdom," Trump said. "The deal includes billions of dollars of increased market access for American exports."

The deal came through at the last minute, with Starmer saying he learnt that Trump had given it his approval when he called him on Wednesday night as he watched a football match.

"This is a really fantastic, historic day," Starmer said during the call with Trump.

He noted that it coincided with the 80th anniversary of "Victory Day" for allied forces -- including Britain and the United States -- over Nazi Germany in World War II.

- 'James Bond' -

Britain had made a major push to avoid Trump's tariffs, which the Republican insists are necessary to stop the United States from being "ripped off" by other countries.

Starmer launched a charm offensive as early as February when he came to the White House armed with an invitation from King Charles III for a historic second state visit for Trump.

The reward came on Thursday, with a trade deal slashes export tariffs for British cars from 27.5 percent to 10 percent, Britain said. 

The move will apply to 100,000 vehicles from luxury makers like Rolls Royce and Jaguar, billionaire Trump added.

"That is a huge and important reduction," PM Starmer said during a visit to a Jaguar Land Rover factory in the central Midlands area of England.

US automakers however said the deal "hurts" companies that have partnered with Canada and Mexico.

The British government insisted that the deal to allow in more US agricultural products would not dilute British food standards, amid concerns over chlorinated US chicken and hormones in US beef.

It also entirely lifts recently-imposed 25 percent tariffs on British steel and aluminium. 

World stock markets mostly rose on news of the deal but uncertainty remained over key issues.

Trump said that "James Bond has nothing to worry about" from his threatened 100 percent tariffs on foreign movies, but did not spell out how Britain could get a carve out.

The deal also failed to mention digital services, with the White House keen to tackle a recent digital services tax imposed by Britain on US tech giants.

- 'Maxed-out' -

Both sides said there would be further negotiations on a fuller deal, but Trump denied overselling the agreement.

"This is a maxed-out deal -- not like you said it really incorrectly," he added, answering a reporter's question on whether he was overstating the breadth of the deal.

The deal is a fresh win for Labour leader Starmer after Britain this week struck a free-trade agreement with India, its biggest such deal since it voted to leave the European Union in 2016.

Torturous negotiations between London and Washington in the years since the Brexit vote failed to produce a deal until now.

But Trump has also been in need of a win after weeks of insisting that countries were lining up to make deals with the United States.

Trump told reporters at the White House he was "working on three of them" and that the British deal could act as a template.

US Commerce Secretary Howard Lutnick said most countries would still be hit with higher tariffs than the 10 percent baseline "Liberation Day" tariffs, and only the "best" would escape.

Top US and Chinese officials are due to meet in Switzerland over the weekend to kickstart trade officials, the first official meeting since Trump's tariffs plunged the world's two largest economies into a trade war.

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