President Donald Trump and British Prime Minister Keir Starmer announced a limited U.S.-UK trade agreement on Thursday, the first since Trump’s global tariffs began on April 2, reducing duties on British cars, steel, and aluminum while maintaining a 10% baseline tariff on most UK goods. Described as a framework rather than a formal agreement, the deal also eases UK non-tariff barriers for U.S. exports, drawing mixed reactions from industry leaders and analysts.
The agreement lowers U.S. tariffs on 100,000 UK vehicles annually from 25% to 10%, with additional vehicles facing 25% duties, benefiting automakers like Jaguar Land Rover and Rolls-Royce. U.S. tariffs on UK steel and aluminum drop from 25% to zero under a quota system, offering relief to the UK steel sector. Both countries agreed to tariff-free beef imports of 13,000 metric tonnes each, with the UK upholding its ban on hormone-treated U.S. beef. The UK reduces its tariffs on U.S. goods from 5.1% to 1.8% and eliminates its 19% tariff on U.S. ethanol for a 1.4 billion-liter quota. The UK also commits to fast-tracking U.S. goods through customs and easing restrictions on agricultural, chemical, energy, and industrial exports, as noted by Bloomberg Opinion columnist Allison Schrager.
Trump, speaking from the White House, called it a “great deal” that “opens up a tremendous market” for U.S. firms, pushing back against critics. Starmer, addressing workers at a Jaguar Land Rover factory in the West Midlands, described it as a “fantastic platform” that protects “thousands of British jobs.” The deal leverages the U.S.’s $3 billion goods trade surplus with the UK, making it a priority amid Trump’s tariffs aimed at reducing the $1.2 trillion U.S. trade deficit.
UK Business Secretary Jonathan Reynolds said the agreement averted “thousands” of job losses at carmakers, while U.S. Agriculture Secretary Brooke Rollins said it would “exponentially increase” U.S. beef exports. UK Steel Director General Gareth Stace called it a “major relief” for the steel sector. The National Cattlemen’s Beef Association hailed it as a “tremendous win” for U.S. ranchers, though the U.S. Meat Export Federation sought clearer details.
Critics were less enthusiastic. Conservative Party leader Kemi Badenoch labeled the deal a “shafting” of the UK, arguing it lowered UK tariffs while U.S. duties remained high. Duncan Edwards, chief executive of BritishAmerican Business, said, “It’s better than yesterday but it’s definitely not better than five weeks ago,” citing the 10% tariffs’ burden. Reform UK leader Nigel Farage called it a “step in the right direction” and a “Brexit benefit.”
Analysts offered contrasting views. Schrager argued the deal’s reduction of UK non-tariff barriers, such as customs delays and agricultural restrictions, is its “best part,” benefiting UK residents more than U.S. exporters by lowering domestic costs, with OECD estimates suggesting 4–5% trade increases. Conversely, Robert Burgess, Bloomberg Opinion’s executive editor, likened the announcement to a “Seinfeld episode about nothing,” noting its lack of a formal agreement and failure to meet Trump’s goals of raising revenue, reshoring manufacturing, or advancing foreign policy, as outlined before April’s “Liberation Day” tariffs. Michael Pearce, deputy chief U.S. economist at Oxford Economics, warned that the 10% baseline tariff will “deliver a big hit to real incomes” and slow U.S. growth in 2025, per CNBC.
The deal sparked a U.S. stock rally, with the S&P 500 passenger airlines index up 5.4%, driven by duty-free Rolls-Royce engines. However, Burgess suggested, per Bloomberg, that the market’s reaction reflects relief that countries can soften Trump’s tariffs with minimal concessions, indicating an “off-ramp” from his trade war, which has raised inflation expectations and cut U.S. GDP growth forecasts by 0.9%, according to the IMF. Trump’s broader tariff strategy, including talks with China and 50% reciprocal duties on 57 trading partners, remains ongoing.
