President Trump and U.K. Prime Minister Keir Starmer announced a deal that will keep U.S. tariffs on British exports at 10% but will cut taxes on U.K. automobiles, steel and aluminum.
The deal should lead to more exports to the U.K. for beef, ethanol and other agricultural products as well as quicker processing of U.S. goods through customs.
Commerce Secretary Howard Lutnick said an unspecified British company will soon announce the purchase of $10 billion in aircraft from Boeing, The Associated Press reported.
According to the AP, which is routinely biased against Trump, the U.S.-U.K. deal offers a “degree of validation” Trump’s tariffs will be able to reach more favorable trade deals for the U.S., as the President has claimed.
Rep. Tim Walberg, of Michigan, believes that is indeed the case moving forward.
“I think it's a start, an evidence that what the President has been saying all along, that this is a tool that will work for restoring America and setting in place an understanding with our allies around the world that it’s time for them to step up to the plate, and understand that it's not a free pass anymore. You have to treat us at least fairly on the trade end,” Walberg said on Washington Watch Thursday.
Some of the deal’s finer points are still being negotiated, Trump said.
Auto tariffs will drop from 27.5% to 10% on a quota of 100,000 vehicles and import taxes on steel and aluminum will decrease from 25% to zero, The AP reports.
In response, the U.K. will reduce tariffs on 2,500 U.S. products such as olive oil, wine and sports equipment. That will bring down the average tariff rate to 1.8%, The AP reports.
Allies pick special day to announce deal
The symbolism of the announcement coming on VE Day – Victory in Europe Day, commemorating the surrender of Germany in May of 1945 – wasn’t lost on the two world leaders.
“To be able to announce this great deal, on the same day 80 years forward, almost at the same hour,” Starmer said, “I think is incredibly important and makes this truly historic.”
Trump said the deal provides American companies with unprecedented access to U.K. markets.
“This U.K. will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products. This is now turnout to be a really, really great deal for both countries,” he said.
Starmer agreed.
“This is going to boost trade between and across our countries. It’s going to not only protect jobs but create jobs, opening market access,” he said.
Critics say the deal’s impact is oversold.
“It’s a very small win and it’s limited in scope,” Josh Lipsky, chair of international economics at the Atlantic Council, said on CNBC Thursday.
In a statement to media ,Starmer said he’ll “always act in Britain’s national interest,” and called the U.S. “an indispensable ally for both our economic and national security.”
Agriculture Secretary Brooke Rollins is expected to travel to the U.K. next week to continue discussions on U.S. beef exports.
The numbers in the U.K. deal shouldn’t be considered a blueprint for ongoing negotiations with other nations, Trump said, noting trade imbalances are different from nation to nation.
Rep. Walberg, who represents Michigan's 5th District, told show host Tony Perkins the trade deal helps his state's auto industry, for example, and also agriculture, too.
"It helps the farmers in my district who were concerned but have been willing to take a deep breath and hope that things will work out," he advised.
During his first term, President Trump's tariffs hurt Midwest farmers when China refused U.S. imports for soybeans.
Exactly when all the reported new numbers take effect is still being finalized, Walberg said.
“But the fact that it’s been announced indicates that it’s coming quick,” he said.
Will the dominoes start falling?
The U.S.-U.K. deal could be the first of many.
Trump indicated last week that Treasury Secretary Scott Besant was in active talks with at least 30 other countries.
“That indicates things are ramping up, and if the U.K. goes this direction, I think there are other countries that are going to want to do similar things,” Walberg said.
