US tariffs: Donald Trump announces ‘breakthrough’ trade deal with UK

US President Donald Trump announced a trade framework with the UK, hailing it as a “breakthrough” that will bring down barriers and expand market access for American imports.

“I’m thrilled to announce that we’ve reached a breakthrough trade deal with the United Kingdom,” Trump said Thursday in the Oval Office.

Trump said final details of the pact would still be negotiated over the “coming weeks.” But under the agreement, the UK would fast-track American goods through their customs process and reduce barriers on agricultural, chemical, energy and industrial exports.

“The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers,” Trump said.

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As details of the trade deal were emerging on Thursday, the Irish Farmers’ Association raised concerns about the prospect of US beef exports being allowed into the UK under the proposed deal.

“Think we will have to see the detail, but this would have been the major concern of ours ever since the Brexit vote in 2016,” an IFA spokesman said.

“Given our export profile, not to mention the UK being our closest and best-priced market, displacement of our product is a danger.”

Irish beef exports to the UK were valued at €1.3 billion last year with the UK market accounting for 47 per cent of total beef exports.

The US-UK announcement is the first Trump made since imposing high tariffs on dozens of US trading partners. The president later paused those duties temporarily in order to allow nations to reach agreements with the US.

“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,” said UK Prime Minister Keir Starmer, who dialled into the event by phone.

The pact spurred cautious optimism on Wall Street, with stocks up and bonds down amid hopes that the agreement could be a blueprint.

Trump cheered the market reaction, and predicted investors would be even more encouraged if Congress passes a law extending his tax cuts, comments that spurred the S&P 500 Index to extend gains to session highs, climbing about 1.5 per cent.

“If that happens, on top of all of these trade deals that we’re doing, this country will hit a point – you better go out and buy stocks now,” he said. The British deal may provide clues for the shape of potential future agreements with other economies. The terms are limited in scope and they keep in place a 10 per cent baseline tariff, according to US Secretary of Commerce Howard Lutnick.

Under the agreement, UK manufacturers would be allowed to send 100,000 cars into the US under a 10 per cent tariff – rather than a 27.5 per cent rate they previously faced after Trump raised duties.

“For the UK auto people, this is tens of thousands of jobs that the president agreed that he would protect for them,” Lutnick told reporters.

Engines and plane parts from Rolls-Royce will be able to enter the US market without tariffs and a British airline will buy $10 billion worth of Boeing planes, Lutnicksaid, without naming the carrier.

British farmers will be given a tariff-free quota for 13,000 metric tons of beef. The UK will not weaken its food standards on American imports, its government said.

The two sides differed on some key details, pointing to the hastily arranged nature of the agreement.

The British government released a statement saying US tariffs on steel and aluminium from the UK will go to zero, but the White House put out its own description less than an hour later saying they “will negotiate an alternative arrangement” to the metals duties and that the agreement creates “a new trading union” on the materials.

Among the important issues that still need to be worked out: how or if the UK would alter its digital services tax, which impacts some big US tech companies.

The UK is not changing its tax under the deal, according to a fact sheet from Starmer’s government. Instead, the nations “have agreed to work on a digital trade deal that will strip back paperwork for British firms trying to export to the US.”

Talks will also continue on the pharmaceutical industry and remaining levies, the UK said. But the Trump administration will give the UK “preferential treatment” in any additional sectoral tariffs Trump decides to impose, which are expected to include drugs, lumber, copper, and semiconductors, among other products.

British government officials had for weeks pushed their US counterparts to relax Trump’s 25 per cent tariffs on steel, aluminium and automobiles.

The UK and US are also expected to negotiate an advanced technology partnership on issues including quantum computing, nuclear fusion and aerospace.

With polls showing Americans souring on his economic stewardship, Thursday’s deal is a sign that Trump is seeking an off-ramp from his plan to raise US tariffs to their highest level in a century. Trump has been trying to pressure other countries to reach quick agreements with the US amid the 90-day reprieve. The UK’s tariffs were originally set at 10 per cent, meaning it didn’t directly benefit from that temporary easement.

“Today’s action also sets the tone for other trading partners to promote reciprocal trade with the United States,” the White House said in its statement.

Yet the 10 per cent tariff rate for the UK will not serve as a template for negotiations with other countries, Trump said. “That’s a low number, they made a good deal. Many, some, will be much higher,” Trump told reporters.

The president is also locked in a standoff with China, the US’s third-largest trading partner on which he imposed 145 per cent tariffs. Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer are kicking off formal talks this week with their Chinese counterpart, but Trump ruled out preemptively lowering his duties to speed a deal. – Bloomberg