Trump agrees to cut tariffs on UK autos, steel and aluminum in a planned trade deal with Britain
WASHINGTON — President Donald Trump has agreed to cut tariffs on UK autos, steel and aluminum in a planned trade deal with Britain, which would buy more American beef and streamline its customs process for goods from the United States.
The symbolically resonant agreement still has yet to be finalized, but it suggested that Trump was still able to negotiate with other countries after his vast set of tariffs stoked fears around the world of an economic downturn and higher inflation.
The announcement provided a political victory for UK Prime Minister Keir Starmer and offered a degree of validation for Trump's claims that his turbulent approach on trade may be able to rebalance the global economy on his preferred terms.
The US president talked up the agreement to reporters from the Oval Office, even as the fine print remains in flux.
“The final details are being written up,” Trump told reporters. “In the coming weeks, we’ll have it all very conclusive.” The president said that the agreement would lead to more beef and ethanol exports to the UK, which would also streamline the processing of US goods though customs. Commerce Secretary Howard Lutnick said the baseline 10% tariffs would stay in place, while UK officials said that Trump's auto tariffs would go from 27.5% to 10% on a quota of 100,000 vehicles and the import taxes on steel and aluminum would go from 25% to zero.
Starmer, speaking over the phone to Trump, stressed the importance of the relationship between the two countries as the anniversary of the World War II victory in Europe was being commemorated.
“To be able to announce this great deal on the same deal 80 years forward, almost at the same hour and as we were 80 years ago with the UK and the US standing side by side, I think is incredibly important,” Starmer said.
The planned deal was the first outlined since Trump began his stutter-step efforts to rewire the global economy by dramatically increasing import taxes in an attempt to increase domestic manufacturing. The Republican president quickly rolled out tariffs after returning to the White House, targeting traditional allies such as the UK with import taxes on steel, aluminum and autos. Trump announced near universal tariffs on April 2, then partially retreated a week later and announced that his administration would seek individual agreements with various countries over the next few months.
The US already runs a trade surplus with the UK, making it a bit easier to find common ground as Trump has staked his tariffs on specifically eliminating the annual trade deficits with multiple nations he says have taken advantage of the US
No new deals have been reached with America's largest trading partners, including Canada, Mexico and China. Trump has left the highest tariffs in place on China, sparking a confrontation between the world's two biggest economies. Washington and Beijing are sending officials to Switzerland this weekend for an initial round of trade talks.
Trump promised on Thursday that there are "many other deals, which are in serious stages of negotiation, to follow!” Starmer, speaking at a defense conference in London, said “talks with the US have been ongoing, and you’ll hear more from me about that later today.” The US and the UK have been aiming to strike a bilateral trade agreement since the British people voted in 2016 to leave the European Union, allowing the country to negotiate independently of the rest of the continent. Then-Prime Minister Boris Johnson touted a future deal with the US as an incentive for Brexit.
Negotiations started in 2020, during Trump’s first term. But the talks made little progress under President Joe Biden, a Democrat and a critic of Brexit. Negotiations resumed after Trump returned to office in January and intensified in recent weeks.
A major goal of British negotiators has been to reduce or lift the import tax on UK cars and steel, which Trump set at 25%. The US is the largest destination for British cars, accounting for more than a quarter of UK auto exports in 2024, according to the Office for National Statistics.
Britain has also sought tariff exemptions for pharmaceuticals, while the US wants greater access to the British market for agriculture products. Starmer’s government has said it won’t lower UK food standards to allow in chlorine-rinsed American chicken or hormone-treated beef.
The British government will see a deal as a vindication of Starmer’s emollient approach to Trump, which has avoided direct confrontation or criticism. Unlike the European Union, Britain did not announce retaliatory tariffs on US goods in response to Trump’s import taxes.
A trade deal with the United Kingdom would be symbolically important and a relief for British exporters. But an agreement would do little to address Trump’s core concern about persistent trade deficits that prompted him to impose import taxes on countries around the world.
The US ran a $11.9 billion trade surplus in goods with the UK last year, according to the Census Bureau. The $68 billion in goods that the US imported from the UK last year accounted for just 2% of all goods imported into the country.
The US is much more important to the UK economy. It was Britain's biggest trading partner last year, according to government statistics, though the bulk of Britain’s exports to the US are services rather than goods.
Trump has previously said that his leverage in talks would be US consumers, but he appeared to suggest that the UK would also start buying more American-made goods.
“I think that the United Kingdom, like every other country, they want to ... go shopping in the United States of America," he said.
A trade deal with the US is one of several that Starmer’s government is seeking to strike. On Tuesday, Britain and India announced a trade agreement after three years of negotiations. The UK is also trying to lift some of the barriers to trade with the EU imposed when Britain left the bloc in 2020.
Jill Lawless reported from London. Zeke Miller contributed to this report.
AP
