On May 8, 2025, the United States and the United Kingdom unveiled a new trade agreement aimed at easing tariffs and strengthening their economic partnership. This marks the first major trade deal under President Donald Trump’s second term and Prime Minister Keir Starmer’s leadership.
Under the agreement, the U.S. will cut tariffs on British car imports from 27.5% to 10% for up to 100,000 vehicles per year, offering a boost to British automakers like Jaguar Land Rover and Aston Martin. In return, the U.K. will lower tariffs on American beef and ethanol, giving U.S. farmers broader access to British markets.
The deal also eliminates tariffs on British steel and aluminum exports to the U.S., offering relief to the U.K.’s struggling metal industries. However, a 10% baseline tariff will remain on most British exports, reflecting the U.S. administration’s continued focus on protecting domestic industries.
While the deal delivers sector-specific gains, it falls short of a comprehensive free trade agreement. Areas like digital services and broader market access remain unresolved and are expected to be part of future negotiations.
Strategically, the agreement provides economic reassurance for the U.K. in the post-Brexit era and signals a continued shift in U.S. trade policy towards selective bilateral deals rather than sweeping free trade frameworks.
This agreement represents a pragmatic step forward in redefining U.S.-U.K. trade relations amidst evolving global trade dynamics.
