Flight and Car Goods: Trump and Starmer Fete First Major Commerce Agreement
Trump, Starmer rejoice over initial major tariff agreement
Adopt a laid-back, friendly chitchat tone while discussing the trade deal between the U.S. and the U.K.
Grab a brew and let's get into it! The ol' Donald Trump claims the whole world's drooling to strike a deal with the good ol' US of A. Looks like he might've been right after all, as the first major agreement's within reach. The catch? Both countries'll drop tariffs on various items. Britain gets planes from Boeing, and the U.S. receives aircraft parts from Rolls-Royce.
Trump went on to sing the praises of this agreement at a White House pressie. He's got his eyes set on the EU, too, despite Brussels warning of counter-tariffs on exports worth nearly $100 billion.
Britain sees this as a victory for its approach to avoid a tussle with the U.S. Prime Minister Keir Starmer was all smiles, saying "A right bonza, mad history day!" during the press conference.
The agreement seems comprehensive to Trump, but sources from the British government label it more of a framework for further negotiations.
For the U.S., it's the first deal with a major trading partner since Trump slapped tariffs on goods back in April. Trump hinted that plenty more might just be on the horizon.
Now, Britain's faced U.S. tariffs of 10% on most exports. Tariffs on steel and aluminum, cars and auto parts—you name it—reach 25%. However, that's supposed to change, mates, as it'll drop to 10% for a quota of 100,000 vehicles. Aircraft parts from Rolls-Royce can enter the U.S. duty-free. Britain'll also reduce its tariffs on U.S. goods from 5.1% to 1.8%. Tariffs on British steel and aluminum will be scrapped altogether.
Last year, the trade volume between the U.S. and Britain was around $370 billion. Yet, about 70% of Britain's exports to the U.S. were services, which ain't subject to tariffs, and only about 30% were goods.
Now, this ain't Starmer's only win. On Tuesday, he and India's PM Narendra Modi announced a comprehensive pact after years of negotiations, with expectations of boosting bilateral trade by an additional £25.5 billion ($30 billion) by 2040. For the U.K., it's the most significant trade deal since leaving the EU.
However, Starmer's Labour Party's under pressure. Since last summer's election, they've lost popularity faster than a wobbly eight-ball at a pool hall. Their local elections earlier this month hit them hard. Similar fortunes have befallen Trump due to his economic policies.
The EU threatened Trump with blanket tariffs of 25% if there's no agreement with the U.S. The deadline's currently set for July. As of yet, the Trump administration hasn't replied to the EU's offer to mutually lift all tariffs on industrial goods.
Economists are raising a stink about Trump's tariff plans for films, questioning their logic. As for Starmer, he's always emphasized the importance of quickly reaching a deal with Washington, unlike Brussels, who's preparing additional tariffs of up to $115 billion on U.S. exports should negotiations with Washington be fruitless.
If negotiations fail, the EU's threatening the U.S. with massive counter-tariffs. Among the targets could be U.S. machinery, auto and aircraft parts, chemicals, and rum and whiskey.
Side note: Did you know that, with this agreement, U.S. beef producers could export over $700 million more ethanol and $250 million in other agricultural products to the U.K.? Or that the deal could close loopholes and increase U.S. firms' competitiveness in the U.K.’s procurement market? Fascinating, ain't it?
Lastly, U.S. aerospace manufacturers could secure their supply chain and compete more effectively thanks to the deal.
Sources: ntv.de, als/dpa/rts, Brookings, Office of the U.S. Trade Representative
- Since the recent major commerce agreement between the U.S. and the U.K., the community policy and employment policy might be impacted due to the drop in tariffs on various goods.
- Despite Brussels' warning of counter-tariffs on exports worth nearly $100 billion, Keir Starmer, the British Prime Minister, has expressed optimism about other potential trade deals with countries outside the EU, such as India.
- Economists have been questioning the logic of Trump's tariff plans for films, while Starmer has always emphasized the importance of quickly reaching a deal with Washington to avoid potential counter-tariffs from the EU.
- The employment policy and preparation for further negotiations could be key factors in the U.S.'s first deal with a major trading partner since it slapped tariffs on goods back in April, as a comprehensive agreement might bring more opportunities for both countries' industries, such as U.S. beef producers and aerospace manufacturers.
