President Donald Trump announced Thursday that the U.S. had reached a trade deal with the United Kingdom that would lower tariffs in exchange for greater market access.
It’s the first major deal to be outlined as the Trump administration negotiates with major trading partners amid an effort to impose reciprocal tariffs.
“The final details are being written up in the coming weeks, will have it all very conclusive but the actual deal is a very conclusive one, we think just about everything's been approved,” President Trump said.
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The Trump administration said the U.K. would open market access for American ethanol, agriculture including beef, and chemicals, among other items it estimates will create $5 billion in "opportunity," streamline customs processes and see the purchase of billions of dollars worth of plans.
“You have beef, you have poultry, you have potentially, we're talking to them about pork, although they're pushing back really hard on pork, fish and shellfish, right?" said Commerce Sec. Howard Lutnick. "Agricultural products all along you've got fruits and vegetables. I mean, you would say, really, these things were locked out? And the answer is, they were, and now they're going to be open."
The U.S. would continue imposing a 10% tariff on most imports from the U.K., but would lower its auto tariffs from 25% to 10% for 100,000 U.K. vehicles, particularly impactful for U.K.-based Rolls Royce, and remove steel and aluminum tariffs.
“Now their steel industry will get stronger and stronger," Lutnick said. "They're going to set tariffs and quotas on all the other countries to keep it out so we don't have sort of a hole in our wall, if you will coming through the U.K."
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The leaders each touted the agreement and close partnership.
"This is now turning out, I think, really to be a great deal for both countries,” Trump said.
“We've always had a fair and balanced arrangement between our countries. This builds on that, hugely important for sectors like car manufacturing and for steel and aluminum and so many others,” U.K. Prime Minister Keir Starmer said during a phone conversation with Trump, before holding his own press conference at an auto plant.
Both pointed for the potential for further growth.
“In technology, they really want to work together with us," said Lutnick. "They want to do something special, and we're going to examine that and work together. So this relationship can only grow."
The U.K. sits behind Canada, Mexico, China and the Netherlands as one of the largest purchasers of U.S. goods. The U.K. ranks No. 12 in exports to the U.S.
The United Kingdom is among just a handful of nations in which the U.S. has a trade surplus, as the U.K. imported $79.9 billion in U.S. goods in 2024 while exporting $68.1 billion.
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President Trump emphasized that this deal would be "the first of many” but also warned that the 10% rate is not a template for others as the U.S. negotiates with major trading partners.
“Many, some will be much higher because they have massive trade surpluses and, you know, many cases they didn't treat us right,” President Trump said.
Lutnick said “there’s lot of countries that are close” to reaching a deal, but declined to name which ones.
“I’d like them, each of them, to try to race to be next," he said. "But the deals that are done first are always better than the deals that are done last."
While many countries reciprocal rates are paused amid the negotiations, the U.S. maintains its higher rate of 145% against China.
Officials from the U.S. and China are expected to meet in Switzerland later in the week. Trump said he expected it to be a substantive meeting, and left open the potential for speaking with Chinese President Xi Jinping after. Trump earlier this week rejected the notion but said that he would lower tariffs to get China to negotiate.
Tariffs are charged to companies when they ship products internationally. Many economic experts say the cost of tariffs are generally passed from the company to consumers. Markets have ebbed and flowed throughout the trade rollout, as some businesses have raised concerns about impacts.
Amid uncertainty over the tariffs, Federal Reserve Chairman Jerome Powell has warned of potential impacts.
"If the large increases in tariffs that have been announced or sustained, they're likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment,” Powell said Wednesday as the Federal Reserve left rates steady.
Lutnick did not agree with the assessment.
“Tariffs are not going to produce higher prices, okay. They just don't. We have to work through this process, for sure, but I think when we're done, the U.S. economy is going to be stronger. Its growth rate is going to be higher, our prices are going to be stable to lower. Our energy prices are going to be lower, and we are going to be in a better place,” Lutnick said.
