POLITICO — 2025-05-08
News from Brussels
U.S. President Donald Trump and British Prime Minister Keir Starmer struck a trade pact Thursday to lower the White House's punishing tariffs on the U.K.’s automotive and steel industries.
The agreement leaves in place the president’s 10 percent baseline “Liberation Day” tariffs imposed on U.K. goods imports early last month and opens the door for ongoing negotiations.
But it lowers Trump’s additional 25 percent tariffs on the U.K.’s automotive, steel and aluminum sectors imposed in early April — a benefit to British automakers who produce the U.K.’s single largest goods export to the U.S.
Speaking in the Oval Office on a televised phone call with British Prime Minister Keir Starmer, Trump hailed an agreement with "truly one of our great allies," which the two countries announced on the 80th anniversary of VE Day.
It will, Trump said, bring the United Kingdom into "economic security alignment" with the United States. "We won the war together exactly 80 years ago … so there can be no more perfect morning to reach this historic agreement," Trump said.
The pact will be seen as a significant step forward for the United States, which has been mired in negotiations with dozens of countries since slapping hefty tariffs on its global trading partners last month. The deal is the first to be announced during the 90-day pause on Trump’s “Liberation Day” tariffs announced last month.
It also represents something of a win for U.K. Prime Minister Keir Starmer, who is struggling in the polls and has tried to prioritize building bridges with Washington at a time other world leaders have taken a more confrontational approach.
Ongoing talks between Washington and London will attempt to tackle Trump’s threats to level tariffs on pharmaceuticals — the U.K.’s second-largest goods export to the U.S. at £6.6 billion — and threats to impose new 100 percent duties on foreign films.
But lowering the White House’s 25 percent tariffs on steel will help shore up Britain’s faltering metals industry.
The U.K. will be given a quota of 100,000 cars for export under Trump’s 10 percent tariff, Commerce Secretary Howard Lutnick told reporters during the Oval Office announcement Thursday. British cars above that level will again face the 25 percent tariff.
The U.K. has agreed to accept 13,000 tonnes of U.S. beef into its market, but has insisted that this be high-quality produce, with British farmers afforded the same access to the U.S. market.
London talked up winning “unprecedented market access for British farmers,” while boasting that its protections on food standards — long prized by Brits wary of chlorinated chicken and hormone washed beefed — would be maintained. “We are not going to lower British food standards,” said a No. 10 spokesperson.
"I know our incredible trade team is looking at all the meats, all the produce, really, all of our agriculture exports,” Agriculture Secretary Brooke Rollins said alongside the president.
A tariff on ethanol coming into the U.K. from the U.S. has been slashed to zero. Its digital services tax — a levy on tech giants — has not been reduced as had been suggested at one point during talks.
Starmer, who heaped praise on Trump and his team during the Oval Office call Thursday, said in a statement: “This historic deal delivers for British business and British workers protecting thousands of British jobs in key sectors including car manufacturing and steel.”
Pressure for the Trump administration to announce trade agreements comes as Americans, manufacturers and retailers brace for higher prices in the coming weeks as shipments into West Coast ports plunge to levels not seen since the early days of the pandemic.
Supply chain disruptions could result in shortages of a number of everyday items like cars, furniture, clothes and toys.