Keir Starmer and Donald Trump. Credit: Joshua Sukoff, Shutterstock
The UK and US have agreed a new economic deal that slashes key tariffs and offers limited but significant benefits for carmakers and steel producers.
Announced today, Thursday, May 8, 2025, by Prime Minister Keir Starmer and President Donald Trump, the agreement marks the first official trade deal between the two nations under the current administrations.
Biggest trade deal highlight: Tariff cuts for cars and steel
One of the most high-profile outcomes is the reduction of US tariffs on British cars, which will drop from 27.5 per cent to 10 per cent for up to 100,000 vehicles annually – roughly the UK’s total car exports to the US last year. It’s been confirmed that this will ‘save hundreds of millions a year for Jaguar Land Rover alone’, cited by Gov.uk’s press release.)
Tariffs on UK steel and aluminium exports to the US – previously at 25 per cent – have now been reduced to zero. The British government estimates this will save thousands of jobs in the UK steel industry, which exported £370 million ($492 million) of steel to the US last year, or 9 per cent of total steel exports, according to CNN’s report.
Agriculture and ethanol access
Both sides secured greater market access for agricultural goods:
- Each country will have a tariff-free quota for 13,000 metric tonnes of beef exports
- The tariff on US ethanol will be removed
- US Agriculture Secretary Brooke Rollins said the deal will “exponentially increase our beef exports” to Britain, according to The Guardian.
The UK government insisted there would be “no weakening of food standards,” amid concerns about hormone-fed beef and chlorinated chicken. The National Farmers Union welcomed the deal cautiously, although there are concerns on the use of US ethanol.
The White House fact sheet outlined further provisions (or lack of):
- Digital taxes: No changes have been made to the UK’s digital services tax.
- Pharmaceuticals: No agreement yet, but future negotiations are expected.
- Film industry: Trump’s recent threat of a 100 per cent tariff on foreign films remains unaddressed in the deal.
- Technology: Both countries plan to collaborate on future tech, including biotech, life sciences, quantum computing, nuclear fusion, aerospace and space.
- Customs and procurement: The deal will streamline customs and offer US firms more access to UK government contracts.
The deal is described as a “framework” for broader talks still to come. While it offers immediate relief for certain sectors, some issues remain unresolved, including tariffs on pharmaceuticals and digital trade regulations.
Starmer said, “This is jobs saved, jobs won but not job done and our teams will continue to work to build on this agreement.” Trump called the negotiations a “huge deal” and hinted that more agreements are expected before July 8, as reported by CNN. ‘The US still faces more than one hundred trade agreements to complete before its 90-day pause on tariffs runs out on July 8.’
What does the UK-US trade deal really mean for the UK?
While the trade agreement focuses mainly on jobs, tariffs, and exports, it also opens the door to deeper geopolitical shifts. Some analysts suggest it positions the UK more firmly alongside the US on the global stage, especially as tensions continue with Russia and the European Commission adopts a more confrontational stance.
Could this deal give the UK more negotiating power in future global conflicts? Or does it risk making Britain overly reliant on Washington’s terms? With the door now open to more US cars, agricultural products, and potentially more US items entering the UK market, questions also remain about the long-term impact on UK standards, environmental protections, and consumer choice.
What do you think it means for the future of UK trade and identity? Let us know in the comments below.
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