U.S. President Donald Trump and U.K. Prime Minister Keir Starmer announced a historic trade deal on Thursday, 8 May, 2025, marking the first major agreement of Trump’s administration since imposing sweeping global tariffs in April.
Described by Trump as a “full and comprehensive” pact, the deal reduces tariffs on key goods, boosting trade between the two allies and cementing their economic ties. The announcement, made via a televised phone call, followed weeks of negotiations and is seen as a diplomatic victory for both leaders.
The agreement slashes U.S. tariffs on British steel and aluminum to 0%, down from 25%, and reduces car export tariffs from 27.5% to 10% for up to 100,000 U.K. vehicles annually. It also provides reciprocal market access for beef, with a tariff-free quota for 13,000 metric tons of U.K. beef, while maintaining Britain’s strict food standards, alleviating concerns about U.S. hormone-treated products.
Tariffs on ethanol, used in beer production, have been eliminated, benefiting both nations’ agricultural sectors. However, a 10% tariff remains on most U.K. goods entering the U.S., indicating the deal’s limited scope compared to a full free trade agreement.
Trump, speaking from the Oval Office, called the deal “a great honor” and praised Starmer’s “talented team,” emphasizing increased U.S. export opportunities, particularly for beef and ethanol.
Starmer, addressing the press in London, hailed it as a “fantastic, historic day” that protects British businesses and saves thousands of jobs, especially in the steel and automotive industries. He acknowledged the deal’s narrow focus but expressed hope for further tariff reductions.
The agreement follows Starmer’s diplomatic efforts to build a rapport with Trump, including meetings at the White House in February. Unlike predecessors Theresa May, Boris Johnson, and Rishi Sunak, Starmer’s non-combative approach navigated Trump’s tariff policies successfully. British officials credit his charm offensive for securing the deal, which comes days after a U.K.-India trade agreement, signaling a robust trade agenda post-Brexit.
Global markets reacted positively, with U.S. stocks hitting session highs and the pound rising. However, questions linger about unresolved details, such as potential conflicts with U.K. food standards. Economists suggest the deal’s immediate economic impact may be modest but sets a foundation for long-term growth. Both leaders expressed optimism, with Trump hinting at more deals to come, potentially with China.
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