Trump unveils UK trade deal, first since tariff blitz
US President Donald Trump makes a trade announcement as British ambassador to the United States Peter Mandelson (R), looks on in the Oval Office of the White House in Washington, DC, on May 8, 2025. (Photo by Jim WATSON / AFP)
WASHINGTON, United States — US President Donald Trump and British Prime Minister Keir Starmer unveiled a “historic” trade agreement Thursday. This is 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 lift them entirely on steel and aluminum. However, a 10-percent baseline levy on British goods stays in place.
Trump announced the deal while making a phone call to Starmer in the Oval Office. He said Britain would in return open up markets to US beef and other farm products.
But the deal remained thin on details. This, despite Trump hailing it as a template for deals with other countries such as China after his “Liberation Day” tariffs in April.
READ: Trump’s ‘Liberation Day’ wallops stock markets worldwide
“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. Starmer said he learnt that Trump had given it his approval when he called him on Wednesday night. The call came through as he was watching 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’ need not have trade worries
Britain had made a major push to avoid Trump’s tariffs. The Republican insists these 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. He was armed with an invitation from King Charles III for a historic second state visit for Trump.
The reward came on Thursday. The trade deal slashes export tariffs for British cars from 27.5 percent to 10 percent, Britain said.
READ: ‘Liberation Day’ of tariffs is coming. Here’s what it could mean for you
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,” Starmer said during a visit to a Jaguar Land Rover factory in the central Midlands area of England.
However, US automakers 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. This is amid concerns over chlorinated US chicken and hormones in US beef.
It also entirely lifts recently-imposed 25-percent tariffs on British steel and aluminum.
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 he did not spell out how Britain could get a carve out.
The deal also failed to mention digital services. The White House is keen to tackle a recent digital services tax imposed by Britain on US tech giants.
The trade deal is ‘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. He was 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. This is the UK’s 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. For weeks, he has been 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.” He said 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. He said only the “best” would escape.
Top US and Chinese officials are due to meet in Switzerland over the weekend to kickstart trade officials. This is their first official meeting since Trump’s tariffs plunged the world’s two largest economies into a trade war.
