US President Donald Trump and UK Prime Minister Sir Keir Starmer unveiled a new transatlantic trade agreement during a live phone call, describing the pact as “historic”.
The deal, which marks the first trade accord since Trump’s imposition of sweeping global tariffs, was revealed on 8 May—Victory in Europe Day—symbolising 80 years since the Allied triumph over Nazi Germany.
Major Tariff Reductions Secured
Sir Keir welcomed the agreement, which includes the removal of 25% tariffs on British steel and aluminium, although he acknowledged that some technical details of the pact remain under negotiation.
The deal also reduces the tariff on UK car exports to the US from 27.5% to 10% for the first 100,000 vehicles annually. The move is expected to secure thousands of automotive jobs across Britain.
Mike Hawes, head of the Society of Motor Manufacturers and Traders (SMMT), hailed the development, calling it “great news for the industry and for consumers”.
Beef Clause Sparks Controversy
One of the most contentious elements of the agreement is the introduction of a tariff-free quota allowing 13,000 tonnes of US beef into the UK market.
While Trump claimed Britain would “take what they want” on American beef and chicken imports—dismissing concerns over chlorinated chicken—UK officials insisted that domestic farming standards had not been compromised.
Sir Keir affirmed that the UK had held firm on its “red lines” regarding food safety and farming practices, though farming groups remain concerned. Tom Bradshaw, president of the National Farmers’ Union, warned: “Two agricultural sectors are being asked to bear the cost of tariff reductions that benefit other industries.”
Digital Tax Unchanged, Ethanol Tariffs Cut
Amid speculation that the UK would ease its digital services tax—which largely affects US tech giants—Downing Street confirmed the levy will remain unchanged.
However, both governments have agreed to negotiate a separate digital trade agreement aimed at reducing administrative barriers for British exporters.
The UK also consented to cut tariffs on US ethanol, further widening the scope of the agreement.
Preferential Terms for Pharmaceuticals and Rolls-Royce Exemptions
While US tariffs on UK pharmaceuticals remain undecided, the Prime Minister stated that Britain expects a “significantly preferential” arrangement.
Meanwhile, Rolls-Royce aircraft engines—critical to UK manufacturing—will be exempt from tariffs, according to US Commerce Secretary Howard Lutnick. He also confirmed that a UK-based airline would be purchasing $10 billion worth of Boeing aircraft.
Deal Follows India Pact
This US-UK agreement follows hot on the heels of a newly announced UK-India trade deal, which promises deep tariff cuts on British exports including Scotch whisky and motor vehicles.
In a speech from the Oval Office, President Trump described the UK pact as “a full and comprehensive one” and rejected claims he had exaggerated its significance: “This is a maxxed out deal, and we’ll make it even bigger.”
Sir Keir echoed the sentiment, declaring: “With this President and this Prime Minister, we’ve accomplished what so many have failed to do over the years.”
