Trump cuts Tariffs on british cars, steel and aluminium—but keeps 10% baseline Tariff in new trade deal
In a move that is likely to reshape transatlantic trade dynamics, U.S. President Donald Trump announced on thursday a partial tariff relief for the United Kingdom as part of a new framework trade agreement. Under the deal, tariffs on British automobiles, steel and aluminium will be significantly reduced, but the U.S. will maintain a baseline 10% import tariff on all other British goods.
The deal, unveiled amid ongoing global economic volatility, offers a political win for U.K. Prime Minister Keir Starmer, who hailed the agreement as a major step toward safeguarding British manufacturing jobs. “This is just the start,” Starmer told workers at a Jaguar Land Rover plant, adding that further negotiations are underway to expand market access.
Under the agreement, the U.S. will slash its 27.5% tariff on British cars to 10% for a quota of 100,000 vehicles annually. Tariffs on steel and aluminium imports will be reduced from 25% to zero. In return, the U.K. has agreed to buy more American beef and ethanol, and to ease customs procedures for U.S. goods.
However, Trump made clear that the 10% baseline tariff on other U.K. imports would remain in place. “That’s a low number,” he said, implying that other nations would face much steeper tariffs. “In many cases, they didn’t treat us right,” he added, referring to America’s trade deficits with other countries.
The president framed the deal as a testament to his hardline trade policy. “We’re about to go up like a rocket ship,” he said, referencing the U.S. economy while dismissing inflation concerns and warnings from American companies about rising costs due to tariffs. He even threatened a 100% tariff on Mattel toys if the company failed to shift production to the U.S.
Commerce secretary Howard Lutnick said the deal would include a $10 billion aircraft purchase from Boeing by a British firm, though details remain unspecified. In parallel, the U.K. government announced that it would lower tariffs on 2,500 U.S. goods—ranging from olive oil and wine to sports equipment—bringing the average tariff rate down by 1.8%.
In a phone call with Trump, Starmer underlined the symbolic importance of the deal. “To be able to announce this on the same day 80 years after Victory in Europe Day is incredibly important and makes this truly historic,” he said.
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Despite the positive headlines, much of the deal remains in flux. Trump told reporters that the fine print would be finalised “in the coming weeks.” A British government official, speaking anonymously, said that further liberalisation was being pursued and that future concessions could bring down the effective U.S. tariff rate even further.
The official also noted the uniquely personal approach required in negotiating with the Trump administration: “You have to be charming and know how to say ‘no’ nicely.”
The U.S. currently runs a $11.9 billion goods trade surplus with the U.K., making the transatlantic relationship less contentious than others. No similar deals have been reached with Canada, Mexico, or china, with tariffs on chinese goods still peaking at 145%.
Washington and Beijing are expected to hold initial trade talks this weekend in Switzerland, but Trump has warned that china would only see tariff reductions if the discussions are productive. “It’s at 145, so we know it’s coming down,” he said, offering little clarity on specifics.
The long-anticipated U.S.-U.K. trade deal gained momentum after Trump’s return to office in January. Negotiations had stalled under President Biden, a Brexit critic, but resumed with vigour this year.
While the deal marks progress, analysts caution that the global trade landscape remains clouded by Trump’s broader tariff regime, which has strained relations with several major U.S. trading partners.
Still, for Britain, the agreement offers a tangible gain after years of post-Brexit economic uncertainty. As Starmer put it to workers: “This is just the beginning.”
