London (Brussels Morning Newspaper) – On Thursday, the United States and the UK are anticipated to unveil an agreement to reduce tariffs on certain goods. This marks the first such deal since U.S. President Donald Trump introduced tariffs on countries globally.
Trump announced on Truth Social that he would conduct an Oval Office news conference at 10 a.m. EDT (1400 GMT) on Thursday regarding a
“major trade deal with representatives of a big, highly respected country.”
Is the US-UK trade pact politically motivated?
A spokesperson for the British government stated that Prime Minister Keir Starmer would provide an update on U.S.-UK trade discussions later on Thursday. Sources reported that the framework of a potential agreement would be revealed.
“The United States is an indispensable ally for both our economic and national security,”
A Downing Street spokesperson stated.
“Talks on a deal between our countries have been continuing at pace, and the Prime Minister will update later today.”
Trump’s trade war has destabilised financial markets and sparked recession concerns as central bankers and business leaders grapple with unpredictable policymaking that disrupts global supply chains and numerous industries.
What are the key elements of the trade deal?
On Tuesday, a British official stated that both parties were collaborating to establish lower tariff quotas—a set of exports that face reduced duties—for steel and automobiles, both of which were impacted by 25% U.S. tariffs.
In exchange, Britain is expected to reduce its tariffs on U.S. cars and eliminate a digital sales tax impacting U.S. tech companies. However, it has not agreed to lower its food standards to provide U.S. producers with increased market access. The fate of the 10% “baseline” tariff that Trump imposed on several countries, including Britain, remains uncertain.
Although any agreement may be limited in scope, it holds political importance for both nations. Investors are keenly watching to determine if Trump can ease tensions in his trade war, as the introduction of global tariffs poses a risk of reigniting inflation and hampering economic growth.
The British government is working to mitigate the impact of Trump’s tariffs while striving to redefine its trade ties with the European Union. Additionally, a new trade agreement with India was reached earlier this week.
