The
United States
and the
United Kingdom
have agreed to
expand market opportunities for U.S. exports
while reducing certain duties for British citizens, President
Donald Trump
declared on Thursday as the initial official statement
trade
agreement since imposing global
tariffs
.
During a short press briefing in the early hours, Trump, speaking from the Oval Office alongside, and the Prime Minister
Keir Starmer
, through a phone call, indicated that the UK would decrease “bureaucratic regulations,” thereby simplifying American exports like beef, ethanol, and various other goods.
“Trump mentioned that it’s about gaining greater access to the country, which was previously quite restricted,” he stated regarding one of America’s strongest allies and major trade associates.
As a result, the U.S. will
reduce the 25 percent tariff on cars
up to 10 percent for 100,000 vehicles and
eliminate steel tariffs.
“It will greatly benefit both nations, and we’ll gain entry to new markets for American chemicals, machinery, and numerous other industrial goods that were previously restricted. They will then have the opportunity to purchase these items at more favorable prices,” stated Trump on Thursday.
The president first hinted at the details of the agreement on Truth Social, describing it as a “complete and all-encompassing” pact that would “strengthen” the bond between the United States and the United Kingdom.
Nonetheless, the specifics of the agreement remain somewhat vague—the final version will be unveiled in the following weeks.
Despite the specifics, the statement alleviated tension on the American stock exchange as the Dow Jones, S&P 500, and Nasdaq Composite all opened higher on Thursday morning.
Even though Trump did not introduce extra conditions
tariffs
In April in the U.K., he maintained a 10 percent overall tariff but applied a 25 percent tariff on aluminum, steel, and vehicles.
The 10 percent basic tariff will stay in place.
Trump’s early declaration caused a plunge in global markets, alarming both consumers and investors.
increasing costs and possible inflation.
The president
temporarily paused the tariffs
To enable nations to create agreements.
Trump has frequently criticized nations for “taking advantage” of the United States through substantial trade imbalances.
trade
deficits. However, unlike nations such as China, the United States faces this issue with nearly
minimal trading shortfall with the U.K.
The previous administration had wished for the UK to
allow hormone-fed beef
.
Part of this agreement involves the U.K. reducing tariffs for both importing and exporting beef. Nevertheless, the British government stated that it will maintain current food safety standards in the country, which means meat from hormone-treated cattle won’t be allowed.
On Thursday, over the phone, Starmer highlighted the trade agreement, emphasizing the significance of the U.K.-U.S. partnership, coinciding with Europe commemorating the anniversary of Allied triumph in World War II.
“To be able to declare this significant agreement 80 years from now, nearly at the exact time and just like we did 80 years ago when the U.K. and the U.S. stood shoulder to shoulder, I believe is immensely significant,” Starmer stated.
The agreement reached on Thursday is just the beginning, according to Trump, who stated that more deals are in progress.
U.S. Commerce Secretary Howard Lutnick claimed that the agreement would generate at least $5 billion in potential for American exports.
After the announcement, Paul Ashworth, who serves as the Chief North American economist at Capital Economics,
wrote
that the agreement was driven by a “haste to showcase advancement on ‘deals'” out of desperation.
“Besides accelerating efforts to initiate trade discussions with China over the weekend, this haste to showcase advancements in ‘deal’ making underscores an increasing sense of urgency within the administration to reduce tariffs before they negatively impact GDP growth and inflation,” Ashworth noted.
Nevertheless, he argued, “That remains positive information.”
Trump’s trade delegation is set to have their initial discussions with Chinese officials in Switzerland over the upcoming weekend. Trump has imposed tariffs as high as 145% on Chinese products, which could result in bare shelves in stores, whereas China has responded with counter-tariffs of up to 125% on certain American goods.
Eric Garcia was involved in compiling this report.
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