By US President Donald Trump and UK Prime Minister Keir Starmer jointly announced on Thursday a “historic” trade deal between the two nations.
President Trump said the deal would help the UK, a relatively “closed” economy, open up, and “bring it into economic security alignment with the US”.
While the deal does not do away with the 10% tariffs imposed on imports from the UK by the US, it has introduced other concessions when it comes to auto imports, commercial planes, and plane parts etc.
The president added that the final details will be written up in the coming weeks, but the actual deal is a very “conclusive” one.
Speaking at the Oval Office in Washington, DC, Trump said,
“Furthermore, in a historic step, the deal includes plans that will bring the United Kingdom into the economic security alignment with the US and its the first of its kind so we have a big economic security blanket which is very important and we feel very comfortable with that because it’s (UK) truly been one of our great(est) allies,” Trump said.
Let’s examine this “full and comprehensive” trade “deal” with the UK:
-The 10% tariffs on goods from the UK into the US remains (so no relief for taxpayers)
-It DOES include lower tariff quotas for UK steel and car exports. Note the use of the word “quotas”, so essentially it
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Keir Starmer, joining Trump via speakerphone from UK, pointed out the occasion on which the deal was signed- Victory in Europe Day or VE Day, when Britain and its Allies formally accept Nazi Germany’s unconditional surrender after almost six years of World War II.
“The deal will boost trade between our countries. It will not only protect jobs but create jobs, opening market access.”
Starmer said the timing couldn’t be more apt because “not only was it 80 years ago today the victory came for Europe after the end of the Second World War but of course on that day the UK and the US stood together as closest of allies.”
UK Prime Minister Kier Starmer praises Donald Trump and his negotiating team:
“Can I pay tribute, Donald, to your negotiating team as well, particularly Howard and Jameson who’ve done an incredible job. A very professional job.”
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Here are the main features of the deal:
Tariff relief for 100,000 cars entering the US every year
1) US Secretary of Commerce, Howard Lutnick, said Trump agreed that the UK could send 100,000 cars into America and only pay a 10% tariff, which will protect their car industry.
𝗨𝗦 𝗮𝗻𝗱 𝗨𝗞 𝗦𝗶𝗴𝗻 𝗟𝗮𝗻𝗱𝗺𝗮𝗿𝗸 𝗧𝗿𝗮𝗱𝗲 𝗗𝗲𝗮𝗹 🇺🇸🇬🇧
Making sense out of Tariffs
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Speaking from a Jaguar Land Rover factory, Starmer said, the deal means US tariffs on cars from the UK will be cut from 27.5% to 10% for 100,000 vehicles every year.
The automaker derives about 25% of its total sales from the US market.
2) According to Lutnick, it has also been agreed that UK will be allowed to sell Rolls Royce engines to Boeing and other plane parts could also come in tariff free while UK will soon announce that it will buying $10 billion worth of Boeing planes, however, he did not reveal which airline will make the purchase.
3) The deal will also include reciprocal market access on beef, Britain said, with UK farmers given a tariff-free quota for 13,000 metric tons.
But the British government said there will be no weakening of UK food standards on imports, which means that hormone-treated US beef will not be admitted to the British market.
Tariff on imported UK steel brought down to zero
4) The UK steel industry, which was on the brink of collapse just weeks ago, will no longer face tariffs with the UK negotiating the 25% tariff down to zero, meaning UK steelmakers can carry on exporting to the US.
This followed last month’s intervention from the Prime Minister to take control of British Steel to save thousands of jobs in Scunthorpe.
5) Starmer also said that while there are no tariffs in place on pharmaceuticals yet, the UK has got within the deal, a “significantly preferential treatment”, whatever happens in the future.
“So this is hugely important for our pharmaceutical sector as well,” he said.
6) The UK will also remove the tariff on ethanol, which is used to produce beer, coming into the UK from the US, down to zero.
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