US-UK deal: Donald Trump announces UK trade pact with reduced barriers, new 10% car tariff

US President Donald Trump revealed in a news conference held at the Oval Office on Thursday that his administration has successfully secured a trade agreement with the United Kingdom. This marks the first trade deal reached by the Trump administration since the implementation of widespread tariffs on U.S. trading partners.

According to Trump, the agreement entails the United Kingdom reducing non-tariff barriers on various U.S. products, such as beef, ethanol fuel, machinery, and chemicals. The baseline tariff of 10%, which has been imposed on numerous countries by Trump, will remain in effect. Additionally, tariffs on British vehicles will decrease from 25% to 10% to align with the established baseline, as confirmed by the commerce secretary.

On Thursday, Trump presented a chart in the Oval Office to illustrate the US-UK agreement. The chart depicted an increase in tariff revenue for Washington as a result of the deal, granting 'unprecedented' access to London markets for a variety of products such as beef, ethanol, and soft drinks.

The announcement by Britain regarding the new trade agreement with the United States includes a reduction of tariffs on UK cars from 27.5% to 10% and the elimination of tariffs on steel and aluminum. As part of the deal, the British government has established a quota of 100,000 UK vehicles that can be imported to the US at a 10% tariff.

In addition, President Trump has indicated that the agreement is expected to increase exports of beef and ethanol to the UK. Despite this, Commerce Secretary Howard Lutnick has stated that the 10% tariffs will remain in effect as the baseline.

Based on industry statistics, the United Kingdom exported £370 million ($492 million) worth of steel to the United States last year, representing 9% of the UK's overall steel exports.

Trump highlighted the significance of the new trade deal between the United States and the UK, emphasizing the commitment to reciprocity and fairness in international trade. The agreement includes provisions for expedited customs processes for American goods in the UK, with some details still being finalized.

President Trump also announced that the deal will lead to billions of dollars in increased market access for American exports, particularly in agriculture. This will greatly benefit American farmers by expanding access to the UK market for products such as beef and ethanol.

Trump said the agreement confirms that "reciprocity and fairness is a critical principle of global trade" and expands opportunities for US agricultural goods. He noted that the final details were still being finalised.

Earlier taking to Truth Social after his conversation with UK Prime Minister Keir Starmer, President Trump described the trade deal as a momentous occasion, characterizing it as a historic milestone and declaring the day as incredibly significant for America.

In his post on Truth Social, Trump expressed his enthusiasm, stating, “Together with our strong Ally, the United Kingdom, we have achieved the first, historic Trade Deal since Liberation Day. This agreement highlights that America is open for business to those who showcase respect for our nation and come to the table with serious proposals. Expect many more deals in the future – stay tuned!”

Trump has forecasted that the United States will generate $6 billion through the 10% universal tariff imposed on the United Kingdom and $5 billion in fresh export opportunities for American ranchers, farmers, and producers.

US stocks saw a slight increase following President Donald Trump's announcement of a trade deal with the United Kingdom during a news conference at the White House. The Dow rose by 235 points or 0.57%, the S&P 500 increased by 0.54%, and the Nasdaq Composite went up by 0.7%.

Stocks fluctuated leading up to the announcement and during Trump's speech, but ultimately trended higher. Market participants are eagerly awaiting a reduction in tariff rates, and will closely analyze the specifics of any trade agreements.

The US dollar index, which measures the dollar's performance against six major currencies, rose by 0.5%. Similarly, the British pound strengthened against the US dollar.