(CP) WASHINGTON – President Donald Trump and British Prime Minister Keir Starmer announced a limited bilateral trade agreement Thursday that maintains the 10% baseline tariff on British exports while lowering duties on specific sectors, marking the first deal since Trump launched his global tariff campaign aimed at reshaping the political map of global commerce in 2025.
The agreement reduces average British tariffs on American goods to 1.8% from 5.1% and cuts U.S. tariffs on British auto imports to 10% from 27.5% for up to 100,000 vehicles annually. Treasury Secretary Scott Bessent hailed the deal as opening “a tremendous market” for American producers worth $5 billion yearly, while eliminating the 25% tariff on British steel and establishing new reciprocal market access for beef products. The timing of the announcement coincided almost exactly with the 80th anniversary of the end of World War Two in Europe, a fact Starmer emphasized in highlighting the historic partnership between the two nations.
Wall Street reacted positively to the news, with major U.S. indexes briefly rising over 1% and airline stocks surging 5.4% after Commerce Secretary Howard Lutnick announced British-made Rolls-Royce engines would enter the U.S. duty-free. The agreement preserves British food standards, meaning American beef raised with growth hormones still cannot enter UK markets, though Agriculture Secretary Brooke Rollins claimed the deal would “exponentially increase” U.S. beef exports to Britain through a new 13,000-metric ton tariff-free quota.
The UK deal represents just the first step in Trump’s ambitious plan to remake global trade relationships, with dozens more agreements expected in coming weeks according to Commerce Secretary Lutnick. The administration faces its biggest challenge this weekend when Bessent and top trade negotiator Jamieson Greer meet Chinese officials in Switzerland to address the virtual trade embargo between the two economic powers, with current tariffs at 145% and 125% respectively. Trump pushed back against viewing the UK arrangement as a template, warning that countries with large U.S. trade surpluses may face much higher final tariffs as he continues his campaign to shrink America’s $1.2 trillion goods trade deficit and reshape the international trade landscape across the political map of the USA and its major trading partners.