Trump, Starmer Herald Limited US-UK Trade Deal, but 10% Duties Remain

• U.S. President Donald Trump and British Prime Minister Keir Starmer on Thursday, May 8, 2025, announced a limited bilateral trade deal that leaves in place Trump's 10% tariffs on British exports, modestly expands agricultural access for both countries, and lowers prohibitive U.S. duties on British car exports.
• The preliminary agreement is the first of dozens of tariff-lowering deals that Trump is trying to land in the coming weeks after blitzing the global economy with steep new import taxes in a bid to reshape global trade in the U.S.'s favour and shrink a US$1.2Tn U.S. goods trade deficit.
• Trump downplayed the U.K. deal as a template for other negotiations, saying that Britain "made a good deal" and that many other trading partners may end up with much higher final tariffs because of their large U.S. trade surpluses.
• In April, Trump imposed reciprocal duties of up to 50% on goods from 57 trading partners, including the European Union, pausing them days later to allow time for negotiations. At the same time, he heaped new 25% tariffs on auto imports and ended all exemptions on steel and aluminium duties, announcing new tariff probes on pharmaceuticals, copper, lumber and semiconductors.
• At a White House press conference with Starmer patched in on a speaker phone, the two leaders heralded the plan as a "breakthrough deal" that lowers average British tariffs on U.S. goods to 1.8% from 5.1%.

(Sources: Reuters)