US President Donald Trump and UK Prime Minister Keir Starmer announced a new trade agreement on Thursday. The US will keep a 10% tax on British imports, while the UK will lower its taxes on US goods from 5.1% to 1.8% and allow more American products into its market.
This is Trump’s first major trade deal since he returned to office in January and began taxing imports from many countries, sparking a global trade dispute.
Trump called the deal a “tremendous” opportunity for US businesses, while Starmer described it as a “historic day.”
The US has faced pressure to ease its trade policies after its taxes on imports caused economic uncertainty worldwide. Since April, US officials have been negotiating with other countries to avoid further damage to global trade.
The US has also imposed high taxes on cars, steel, and aluminum from some nations, including a 145% tax on Chinese goods. US and Chinese officials will meet this weekend to discuss the issue.
Impact on the UK–US President Donald Trump
The UK economy has been struggling, and US tariffs made things harder. Jaguar Land Rover temporarily stopped exports to the US, and the British government had to take over British Steel to keep it running.
The UK refused to lower its food safety standards to match the US, but some American farmers who meet EU rules may get better access to the British market.
It’s unclear if the US will keep its 10% tax on all UK goods or add new taxes on medicines, which could hurt British drug companies like AstraZeneca and GSK.
News of the deal boosted stocks of British companies like Aston Martin, JD Sports, and Primark’s owner.
UK’s Trade Challenges–Trump
After Brexit, the UK is trying to build new trade relationships with the US, China, and the EU without favoring one too much over the others.
Experts say the new US deal won’t have a big immediate effect but could help the UK economy in the long run. The UK also recently signed a trade deal with India.
However, the British government faces political risks. It remains unpopular, and cutting taxes for big tech companies could anger voters.
The UK’s 2% tax on digital companies like Google and Amazon was meant to stop tax avoidance, but these firms have raised prices for customers instead.
A British CEO (who asked not to be named) said trade deals will help the UK economy over time but won’t fix its problems right away.
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