Under the framework agreement, the United Kingdom is to buy more American beef and ethanol and streamline its customs process for goods from the United States. But Trump’s baseline 10% tariffs against British goods are to stay in place, and the Republican president suggested that even higher import taxes would be charged on other countries trying to reach deals with the U.S.
“That’s a low number,” Trump said of the U.K.’s 10% tariff rate, adding that other countries would face higher tariff rates in their deals because the U.S. runs trade deficits with them and “in many cases they didn’t treat us right.”
The U.S. president talked up the framework to reporters in the Oval Office, although the fine print remains in flux.
U.K. officials said Trump’s auto tariffs would go from 27.5% to 10% on a quota of 100,000 vehicles and the import taxes on steel and aluminum would go from 25% to zero. Starmer said Britain would preserve its health and safety standards on food products.
The U.K. government also said it would also reduce tariffs on 2,500 U.S. products such as olive oil, wine and sports equipment, bringing down the average tariff rate 1.8%.
“To be able to announce this great deal, on the same day 80 years forward, almost at the same hour,” Starmer said, “I think is incredibly important and makes this truly historic.”
Starmer later spoke to workers at a Jaguar Land Rover plant and promoted the deal, which he said would protect thousands of auto jobs. He told the workers that “this is just the start,” saying “we are hammering out further details to reduce barriers to trade with the United States and across the world.”
Trump said that fewer container ships arriving from China meant “we lose less money” from the trade deficit, even though the goods in those ships are used by U.S. manufacturers and sold by retailers in ways that can support jobs while holding down prices.
Trump has maintained that there is “virtually” no inflation. The Federal Reserve’s preferred inflation measure has increased at 2.3% annually, slightly higher than the central bank’s 2% target.
The U.S. already runs a trade surplus with the U.K., making it a bit easier to find common ground at a time when Trump has staked his tariffs on eliminating the annual trade deficits with multiple nations he says have taken advantage of the U.S.
A British government official, insisting on anonymity to discuss the talks, said the U.K. planned to seek greater trade liberalization as negotiations continue, such that the effective tariff rate charged by the U.S. could be lower than the 10% baseline.
The official said the talks have been built on the longstanding closeness between the two nations and, when in discussions with the Trump administration, the key was to be charming and know how to say “no” nicely.
The official said Trump had invited the British government to agree to a trade deal before April 2, but the president changed his mind so that he could impose his sweeping “Liberation Day” tariffs. That statement indicates that Trump could have announced some form of Thursday’s agreement weeks earlier.
Trump said Thursday that he “could” lower the 145% rate charged on Chinese goods if the weekend talks go well.
“Right now, you can’t get any higher,” Trump said. “It’s at 145, so we know it’s coming down.”
The U.S. ran a $11.9 billion trade surplus in goods with the U.K. last year, according to the Census Bureau. The $68 billion in goods that the U.S. imported from the U.K. last year accounted for just 2% of all goods imported into the country.
The U.S. is far more important for the U.K. economy. It was Britain’s biggest trading partner last year, according to government statistics, though the bulk of Britain’s exports to the U.S. are services rather than goods.
