- The US-UK trade deal maintains 10% base tariffs but eliminates 25% steel and aluminum tariffs, creating a free trade zone for these metals.
- British car exports to the US will face 10% tariffs for the first 100,000 vehicles, with any additional vehicles subject to 25% tariffs.
- The agreement creates a $5 billion opportunity for new US exports and commits the UK to reduce average tariffs on US goods from 5.1% to 1.8%.
President Donald Trump and British Prime Minister Keir Starmer announced a historic trade agreement Thursday, marking the first deal since Trump implemented global tariffs on April 2, 2025 – a date he dubbed “Liberation Day.”
The agreement maintains the baseline 10% reciprocal tariff on most UK goods but eliminates the 25% tariffs on British steel and aluminum, creating a free trade zone for these metals between the two nations.
“For so many years, everybody talked and talked about a deal,”Trump said during the announcement. “It’s now been done with us.”
Under the deal, British car manufacturers will face 10% tariffs for the first 100,000 vehicles exported to the US annually, with any additional vehicles subject to the higher 25% rate – a significant reduction from the blanket 25% auto tariffs previously imposed on April 2.
The UK has also committed to purchasing $10 billion in Boeing aircraft as part of the agreement, according to US Commerce Secretary Howard Lutnick.
The White House projects the deal will create $5 billion in new export opportunities for American farmers, ranchers, and producers, including more than $700 million in ethanol exports and $250 million in other agricultural products such as beef.
The UK has agreed to lower average tariffs on US goods from 5.1% to 1.8% and remove various non-tariff barriers that had restricted market access for American products.
Prime Minister Starmer, speaking via phone during the White House announcement, called it a “historic day” and said the agreement delivered on his promise to protect British carmakers and the steel sector.
“This is going to boost trade between and across our countries,” Starmer said. “It’s going to not only protect jobs, but create jobs, opening market access.”
The agreement does not modify the UK’s 2% digital services tax on US tech firms, contrary to earlier expectations. Instead, both nations have agreed to work on a digital trade deal aimed at reducing paperwork for British firms exporting to the US.
Trump cautioned that other countries should not expect similarly favorable terms, stating, “That’s a low number. They made a good deal.” The US-UK deal is seen as potentially providing a framework for future negotiations with other trade partners as the 90-day pause on reciprocal tariffs is set to expire in early July.
US total goods trade with the UK was estimated at $148 billion in 2024. The agreement, which both leaders acknowledged still has details to be finalized, comes just days after the UK signed a separate trade deal with India.
Markets responded positively to the announcement, with major US indexes rising over 1% and airline stocks showing particular strength.
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