US-UK Trade Deal: Boeing and Rolls-Royce Headline First Major Trade Agreement Under Trump and Starmer
Trump and Starmer commemorate initial significant tariff agreement
Donald J. Trump, US President, hailed the UK as the first significant trading partner to ink a deal after his tariff policies. "It's a fuckin' big deal," said Trump at a White House press conference, highlighting the reduction of tariffs on goods. The United Kingdom plans to import airplanes from Boeing, with a value of around $10 billion, and the US will import aircraft parts from Rolls-Royce, duty-free.
While tariffs on the majority of exported goods will remain at 10%, those on steel and aluminum, as well as cars and car parts, will see a significant decrease to 10% for a quota of 100,000 vehicles, according to US Trade Minister Howard Lutnick. In addition, Britain will reduce its tariffs on US goods from 5.1 to 1.8 percent, and tariffs on British steel and aluminum will be eradicated entirely.
The deal falls short of being a typical free trade agreement but serves as a framework for further negotiations, with a focus on specific areas. The United States and the UK had a total trade volume of $370 billion last year, of which 70% consisted of services that were not affected by tariffs, and only 30% consisted of goods.
The timing of this announcement is significant, as President Keir Starmer's Labour Party faces mounting political pressure. In less than a year after the last election, Starmer's government has experienced a faster decline in popularity than any other in the UK. Moreover, Trump's popularity has dipped due to his controversial economic policies in the US.
However, Starmer seems to have chalked up a victory in his approach of avoiding a confrontation with the US. He was quick to announce a comprehensive agreement with India on Tuesday, a move that experts anticipate will boost bilateral trade by an additional £25.5 billion by 2040. This announcement followed Starmer's charm offensive during his February visit to the White House, where he presented Trump with an invitation to a state visit by King Charles III.
The response from Brussels remains hostile, with the European Commission preparing new tariffs on US exports worth up to $114 billion, including cars, sweet potatoes, and whiskey. The EU has made it clear that if negotiations with Washington do not lead to a solution, they could impose these tariffs by July. This move prompted Starmer to approach Trump without threatening counter-tariffs, a strategy that seems to have paid off.
The success of this deal underscores further negotiations that Starmer has planned, including potential agreements with China and the EU. However, concerns remain about maintaining the UK's food standards while balancing interests between its crucial trading partners.
Sources
- CNN
- Bloomberg
- REUTERS
- USA
- UK
- Donald Trump
- Keir Starmer
- Tariffs
- EU
- The US-UK trade deal, with a focus on airplane imports from Boeing and aircraft parts from Rolls-Royce, signifies a significant stride under President Donald Trump's tariff policies.
- Despite the reduction of tariffs on goods, the UK will maintain 10% tariffs on the majority of exported goods, while steel and aluminum, cars, and car parts will see a significant decrease.
- Britain will also reduce its tariffs on US goods and eradicate tariffs on British steel and aluminum, as part of this trade deal.
- Keir Starmer, the UK's Labour Party leader, has been applauded for avoiding a confrontation with the US, which may have paved the way for potential agreements with China and the EU, despite concerns about maintaining food standards.
