Uncovering the US-UK Trade Pact: A Triumph for Trump or Just the Start?
British-EU trade agreement stipulated by Trump faces potentialreply from EU with increased tariffs - UK-EU tariffs facing potential response after Trump signs deal with UK
In a move hailed by US President Donald Trump, a trade agreement with the United Kingdom marks his first significant achievement since imposing tariffs on major trading partners earlier this year.
Addressing the media at a White House press conference, Trump declared, "It's a major win, folks. A big, beautiful deal."
Tensions persist, however, with the European Union threatening retaliatory tariffs on US exports worth nearly $100 billion, despite Trump's expressed hope for a EU-US pact.
Keeping a Cool Head
UK Prime Minister Keir Starmer may have emerged as the victor in this engaging dance, remaining composed as he reassured, "It's a fantastic, historic day."
This agreement comes as a relief to Starmer, who earlier sought to avoid a confrontation with Trump. The deal centers around select areas, acting as a foundation for future negotiations rather than a typical free trade accord.
Rolling out the Quotas
As the UK and US shake hands, existing tariffs on various exports will see a notable reduction. Most British vehicles will now face a 10% tariff, down from 100,000 vehicles at 25%. Rolls-Royce aircraft parts will also enter the US duty-free. In response, the UK will import $10 billion worth of Boeing aircraft. Meanwhile, tariffs on British steel and aluminum will be abolished entirely.
The financial landscape between the US and UK was valued at around €370 billion last year, with goods accounting for only a third of the exports, primarily services being the untaxed majority.
Legal Victories and Looming Deadlines
Initial appraisals by legal experts praise the UK for their negotiating prowess, skillfully sidestepping Trump's demands without compromising food standards. Recent demands for the abolition of digital service taxes have also been silenced.
Trump has set a deadline for the EU in July, threatening a 25% blanket tariff if no agreement is reached. To date, the Trump administration has not responded to Brussels' offer to lift all tariffs on industrial goods.
A Tough Negotiation Ahead
Trump aims to rebalance trade using tariffs, redirecting manufacturing to US soil and fund his costly tax cut promise. The EU Commission, in an effort to counterbalance, is considering additional tariffs on a variety of industrial and agricultural goods, including automobiles, sweet potatoes, and whiskey, should negotiations with Washington falter.
Simultaneously, the EU plans to challenge US tariffs at the World Trade Organization, while preparing a case for EU export restrictions on specific products that US companies currently import, such as steel scrap and chemical goods, worth approximately $5.9 billion.
A Complex Web of Relationships
As the UK enters this new strategic partnership with the US, it faces potential complications in forging closer relations with the European Union, a partnership that accounts for nearly half of UK's total exports. The upcoming summit in London on May 19, attended by EU Commission President Ursula von der Leyen and EU Council President António Costa, offers an opportunity for significant progress.
Speculation continues about the possibility of a dynamic agreement in animal health and food standards, a move that may be impacted by concessions made to the US. However, British supermarkets can rest assured that chlorine chicken and hormone-treated beef will not populate their shelves. A British government spokesperson emphasized that the agreement would not lower food safety standards.
- The US-UK trade pact, celebrated by President Donald Trump, is significant as it marks the first major achievement since he imposed tariffs on major trading partners.
- UK Prime Minister Keir Starmer, in his composure, may have emerged victorious in the negotiations, reassuring the public that the agreement is fantastic and historic.
- The agreement centers around select areas, acting as a foundation for future negotiations rather than a typical free trade accord, with most British vehicles facing a reduced 10% tariff and Rolls-Royce aircraft parts entering the US duty-free.
- The EU Commission is considering additional tariffs on a variety of industrial and agricultural goods, including automobiles, sweet potatoes, and whiskey, should negotiations with Washington falter, also planning to challenge US tariffs at the World Trade Organization.
- As the UK enters this new strategic partnership with the US, potential complications may arise in forging closer relations with the European Union, a partnership that accounts for nearly half of the UK's total exports.
