U.S.-U.K. trade deal unveiled: A new chapter in economic relations amid global uncertainty
By bellecarter // 2025-05-11
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  • President Donald J. Trump announced a new "full and comprehensive" trade deal with the United Kingdom on May 8, marking the first major trade agreement since the U.S. initiated a global trade war.
  • The announcement led to a surge in U.S. stock markets, with the Dow Jones Industrial Average, S&P 500 and Nasdaq all experiencing gains, suggesting investor optimism about potential future trade agreements.
  • The agreement aims to provide billions of dollars in increased market access for American exports, particularly in agriculture, by removing non-tariff barriers. However, it does not eliminate the 10 percent tariffs on most British exports to the U.S. and the U.K. will offer U.S. farmers improved access through a lower-tariff quota system.
  • While lower tariffs on British imports will remain, the U.K. government announced that British exports of steel and aluminum will be zero-rated for tariffs and the first 100,000 British cars sold in the U.S. annually will face a reduced 10 percent levy.
  • The deal has been met with mixed reactions, with British Prime Minister Sir Keir Starmer praising it as a victory for British business and workers, while critics call it disappointing. Legal experts question its compliance with WTO rules and there are concerns about its impact on global trade dynamics and ongoing negotiations with other major trading partners like China.
President Donald J. Trump announced a new trade agreement with the United Kingdom on Thursday, May 8, marking the first major trade deal since the U.S. ignited a global trade war. The announcement, made from the Oval Office with British Prime Minister Sir Keir Starmer joining via speakerphone, has sparked a wave of optimism in U.S. stock markets and raised questions about its implications for global trade dynamics. The announcement triggered a surge in U.S. stock markets, with the Dow Jones Industrial Average gaining 254 points, or 0.6 percent, by closing. The S&P 500 also rose by 0.6 percent, while the Nasdaq climbed one percent, reaching its highest intraday level since March 27. This boost comes after weeks of market fluctuations that had some analysts warning of a potential bear market. The gains suggest that investors are hopeful the deal could pave the way for further agreements, particularly with other major trading partners like China. (Related: U.S. and China edge toward trade talks, but sticking points remain.) The U.S.-U.K. trade deal, described by Trump as "full and comprehensive," aims to provide "billions of dollars of increased market access for American exports, especially in agriculture." The agreement promises to remove non-tariff barriers that have previously discriminated against American products. However, the deal does not eliminate the 10 percent tariffs on most British exports to the U.S., which Trump imposed last month. In a significant concession, the U.K. will offer U.S. farmers and ranchers improved market access through a lower-tariff quota system, without altering its food standards. This move has raised concerns among British farmers, with Tom Bradshaw, president of the U.K. National Farmers' Union, expressing worries that "agricultural sectors have been singled out to shoulder the heavy burden of the removal of tariffs for other industries." Despite the new agreement, lower tariffs on imports from Britain will remain. Commerce Secretary Howard Lutnick confirmed that tariffs would continue to generate $6 billion in revenue for the United States. The U.K. government announced that British exports of steel and aluminum would now be zero-rated for tariffs and the first 100,000 British cars sold in the U.S. annually would be subject to a reduced 10 percent levy.

Negotiations and future prospects

Treasury Secretary Scott Bessent informed a House committee earlier this week that the U.S. is engaged in negotiations with 17 out of 18 key trading partners. The U.S.-U.K. deal is seen as a positive step, but larger traders like China may present more significant challenges. China has reiterated its demand for the U.S. to cancel tariffs, a point of contention ahead of talks between Bessent and a Chinese delegation this weekend. Trump has maintained his stance on not reducing the 145 percent tariffs on Chinese goods during negotiations. Meanwhile, the Federal Reserve, citing trade policy uncertainties, decided to keep its benchmark interest rate steady at 4.25 percent to 4.5 percent. Starmer hailed the agreement as a victory for British business and workers, stating, "This historic deal delivers for British business and British workers, protecting thousands of British jobs in key sectors including car manufacturing and steel." However, some critics, like Conservative trade spokesperson Andrew Griffith, called the agreement disappointing, labeling it "a Diet Coke deal, not the real thing. Legal and trade experts have raised concerns about whether the deal complies with World Trade Organization (WTO) rules. The WTO's "most favored nation" concept requires countries to offer the same tariff rates to all countries unless reduced via a bilateral trade deal that covers "substantially all trade," which the U.K.-U.S. pact does not. Watch the video below that talks about Trump using tariff negotiations to isolate China. This video is from the NewsClips channel on Brighteon.com.

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Sources include:

TheNationalPulse.com FT.com Brighteon.com
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