The United States and United Kingdom announced a UK Trade Deal on Wednesday, May 8, featuring reciprocal tariff reductions on key goods including automobiles, steel, and agricultural products. President Donald Trump and UK Prime Minister Keir Starmer heralded the agreement as a step toward boosting trade between the two nations on the 80th anniversary of Victory Day in Europe.
Under the terms announced, the United States will reduce tariffs on UK-made cars, including models from manufacturers like Jaguar Land Rover and Range Rovers, from 25 percent to 10 percent for a quota of 100,000 vehicles. Tariffs on UK steel exports will also drop from 25 percent to zero, subject to an agreed quota. This follows new 25pc tariffs Mr. Trump imposed on foreign cars and steel in March. Last year, UK manufacturers exported just over 100,000 cars to the US, according to the SMMT. These exports amounted to £9bn according to the Office for National Statistics.
Britain will cut taxes on American beef imports to zero, The Telegraph understands. However, hormone-treated beef will not be permitted entry into the United Kingdom market as part of the arrangement. US tariffs on British beef typically vary between 4pc and 26pc depending on the type and quality of cut, according to the WTO. Prime Minister Starmer, speaking via speakerphone during the announcement, called the agreement a "fantastic, historic day" that would boost trade and jobs.
US officials described the deal as a "self-standing agreement" that opens the door for deeper technology partnerships. Sources familiar with the negotiations characterized it as a 12-month "temporary arrangement" preceding a more comprehensive agreement later. The Financial Times previously reported the deal did not include cuts to the digital services tax. University of Michigan economist Justin Wolfers expressed skepticism, noting the United Kingdom accounts for only about 3 percent of United States trade.
The agreement is the first publicly announced deal since the Trump administration imposed sweeping tariffs in April, which ignited a global trade war and rattled financial markets. The president had later paused most of them for 90 days for nations willing to negotiate trade terms. Trade deal latest reporting from the Downing Street indicates the Prime Minister will make an announcement later today. The Department for Business and Trade declined to comment.
Commerce Secretary Howard Lutnick confirmed that general 10 percent tariffs would remain on UK goods under the deal, while the UK was opening markets for an estimated $5 billion in US agricultural products like beef and ethanol. Stocks jump at the open on Wall Street following word of the agreement.
Negotiations with United States trading partners have begun, though talks with China, whose President Xi Jinping met with Russian President Vladimir Putin this week, are scheduled, according to officials traveling to Switzerland on May 8. President Trump had met with Canadian Prime Minister Mark Carney earlier in the week as part of broader trade discussions. Treasury Secretary Scott Bessent had earlier told lawmakers that deals with major trading partners could be announced this week.
Secretary of State Marco Rubio praised the agreement on social media, calling it "an important step towards fair and reciprocal trade." Announcing the Trump’s UK-US trade deal, the president said from the White House Oval Office: "I'm thrilled to announce that we have reached a breakthrough UK Trade Deal with the United Kingdom. There could be no more perfect morning to reach this historic agreement."
