Trump announces trade agreement with Britain

The new US-UK trade deal expands new trade deal expands market access to the UK for American exporters, but keeps in place the ten per cent tariff for goods coming into America from Britain.

Britain's Prime Minister Keir Starmer speaks on the phone to US President Donald Trump from a car factory in the West Midlands. Pictures: AFP/AP

Donald Trump has unveiled a new trade deal expanding market access to the UK for American exporters, but will keep in place his ten per cent tariff for goods coming into the US from Britain.

The agreement is the first to be brokered since the April 2 “Liberation Day” announcement which saw the US impose a ten per cent baseline tariff on most of the world, with Mr Trump describing the breakthrough with the UK on Thursday local time as a “great deal for both countries.”

“The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol, and virtually all of the products produced by our great farmers,” he said. “The UK will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products.”

Mr Starmer, who dialled into Mr Trump’s Oval Office Press Conference, said the agreement would “boost trade between and across our countries” and noted it was being announced 80 years to the day since Winston Churchill had announced victory in Europe after World War Two.

“To be able to announce this great deal on the same day, 80 years forward, almost at the same hour … I think, is incredibly important. That makes this truly historic,” he said.

The UK Prime Minister said the new arrangement was going to create jobs and open up market access, declaring that “there are no two countries that are closer than our two countries.”

“Now we take this into new and important territory by adding trade and the economy to the closeness of our relationship. It is built, as you say, on those notions of fairness and reciprocal arrangements.”

Britain’s digital services tax which applies to the US tech companies including Amazon, Meta and Google is not being changed under the new deal with America. However, the President’s trade adviser Peter Navarro said that it was “still in negotiations.”

“That’s a very big deal to President Trump,” he said.

Speaking in the Oval Office, Commerce Secretary Howard Lutnick said the UK had “agreed to open their markets and that will add $5bn of opportunity to American exporters.”

“And we still have a ten per cent tariff on which will produce $6bn of revenue for the United States,” he said. “This was the President’s deal … He’s the closer. He gets deals done that we could never get done.”

On cars, the US agreed to a tariff discount for 100,000 cars from the UK – dropping the rate from 25 per cent to ten per cent. Additional vehicles beyond the first 100,000 cars will be subject to the higher 25 per cent rate.

Donald Trump looks on as British ambassador Peter Mandelson (3R) speaks during a trade announcement in the Oval Office of the White House. Picture: AFP

Mr Lutnick said the US President had agreed to the concession, saying this would protect the UK car industry. “For the UK auto people, this is tens of thousands of jobs that the President agreed (to) – that he would protect them.”

The White House said the deal would provide more than $700m in new opportunities for US ethanol exports and $250m for other agricultural products including beef, while committing both nations to working together to enhance industrial and agricultural market access.

It would streamline customs procedures for US exports, establish high standard commitments in the areas of intellectual property, labour and the environment while securing the supply chain for US aerospace manufacturers through preferential access to UK components. It would also create a secure supply chain for pharmaceutical products.

The US said the agreement would create a new trading union for steel and aluminium, while the UK argued that its steel would no longer face tariffs.

Last month, the US imposed a new 10 per cent tariff on most goods imported from the UK, as part of the baseline tariff it imposed on all nations, and Britain is also subject to the 25 per cent tariffs Trump imposed on all steel and aluminium imports on March 12. Pic. Ella Pellegrini

Mr Lutnick made clear the UK would be buying more from the US, including “ten billion worth of Boeing planes.”

“This is a perfect example of why Donald Trump produced Liberation Day,” he said. “People don’t understand. He gets things done.”

British ambassador to the UK, Peter Mandelson, made the clear the deal was clinched because of an eleventh hour intervention from Mr Trump.

He said the deal would provide a new “springboard to do what I think will be even more valuable for both our countries in the future, and that’s creating a technology partnership between the United States and the United Kingdom so that we can harness science and technology in order to create future industries and future jobs.”

However, when he was asked what Britain would need to do in order for Mr Trump to drop the ten per cent tariff, the US President responded: “I think that’s set. Because that has to do with a lot of different things.”