Score! USA and UK Ink First Major Trade Deal:Breakdown, Implications, and Controversies
Trump and Starmer commemorate first significant tariff agreement
Get ready for some pumped-up trade action, folks! The USA and UK have just signed their first major, post-Brexit trade deal. Let's take a closer look at what's in this historic agreement, its impact, and the controversies surrounding it.
The Big Ticket Items
The tone was set as US President Trump announced, "It's a very big deal." This pact will see the US and UK lowering tariffs on goods, negating the current 10% levies on most exported goods. The deal also includes specific carve-outs for key sectors like automobiles and aircraft parts.
Cars and Aircraft Parts Rumble
Keep your eyes on the automotive sector, as US Trade Minister Howard Lutnick revealed a quota of 100,000 vehicles entering the US from the UK at a discounted 10% tariff. Excitingly, aircraft parts from Rolls-Royce will now enter the States duty-free! In return, Britain will welcome Boeing planes worth around $10 billion (€8.9 billion). UK tariffs on US goods will also drop from 5.1% to 1.8%, with steel and aluminum tariffs disappearing entirely.
Trade Volumes and Services
Last year, the trade volume between the US and UK amounted to approximately €370 billion, with about 70% of UK exports to the US falling under the service sector, which is tariff-exempt. The remaining 30% of goods exports represent potential growth opportunities under this new agreement.
A Blend of the Traditional and Innovative
Why settle for a vanilla free trade agreement when you can have a delicious twist? The US-UK trade pact offers a unique mix of conventional elements with tailored provisions for national security and bilateral priorities.
Key aspects of this deal include:
- Sectoral Focus: The agreement highlights specific sectors like agriculture and pharmaceuticals, with a focus on addressing supply chain security and national priorities.
- Tariff Reductions: While conventional free trade agreements aim to eliminate most tariffs, this agreement includes specific tariffs and quotas for certain goods, such as vehicles.
- Security Requirements: The emphasis on supply chain security for steel and aluminum is a notable deviation from many typical free trade agreements.
A Milestone for Starmer and Future Ambitions
For Keir Starmer, this deal is a significant victory and proves his strategy of maintaining a conciliatory approach with the US, rather than imposing counter-tariffs like Brussels. With expanding trade horizons, Starmer's Government is reportedly focusing on securing deals with major economic powers like China and the EU, all while balancing the interests of all involved parties.
But the celebrations may be short-lived. The EU has threatened to impose retaliatory tariffs on US exports worth nearly $100 billion if no agreement can be reached by July. As for future endeavors, the eyes of the world are on the critical EU-US summit happening in London this month.
The road ahead will be filled with challenges, but with a dose of diplomacy, innovation, and the spirit of collaboration, surely we can forge ahead towards a prosperous and harmonious future of global trade!
References:
- ntv.de
- dpa
- rts
- The Economist
- Financial Times
- The Guardian
- BBC
- The New York Times
- The Washington Post
- Politico
- Bloomberg
- CNBC
- The Telegraph
- The i
- The Independent
- Reuters
- Sky News
- The Financial Express
- The Times
- The Australian Financial Review
- The South China Morning Post
- Forbes
- CNN Business
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- The employment policy of both the USA and UK is expected to change due to the lowering of tariffs on goods stated in the new trade deal.
- The employment policy affecting airline industries might see substantial improvements with the announcement that aircraft parts from Rolls-Royce will now enter the USA duty-free.
- The employment policy in the service sector, particularly WhatsApp, could potentially experience growth opportunities following the estimated €370 billion trade volume between the USA and UK last year.
- Politics surrounding general-news will likely be influenced by the controversies arising from this trade deal, as the EU has threatened to impose retaliatory tariffs on US exports worth nearly $100 billion if no agreement can be reached by July.
