UK Secures Limited US Tariff Deal Amid Trade Tensions

Britain has clinched a limited trade deal with the United States, securing reduced tariffs on cars and steel after months of negotiations with the Trump administration. Seeking relief from steep U.S. tariffs—10% on most goods and 25% on cars and steel—the UK opted for a sector-focused agreement instead of a comprehensive Free Trade Agreement. Business Minister Jonathan Reynolds emphasized the urgency of easing pressure on key industries like automotive manufacturing.

The deal, finalized during Prime Minister Keir Starmer’s phone call with Donald Trump on Wednesday night, will cut tariffs on 100,000 British-made cars annually to 10%, and reduce steel tariffs to zero. In exchange, the UK will allow more U.S. beef into its market while maintaining strict food safety standards, and drop tariffs on ethanol. However, disagreements remain, notably over Britain’s Digital Services Tax, which the U.S. wanted removed.

Trump’s personal affinity for Britain and London’s diplomatic charm offensive—including a royal invitation for a second state visit—played a role in securing the deal. Starmer praised the agreement as a milestone in U.S.-UK relations, calling Trump’s trade leadership “appreciated.”

Despite pressure from exporters and investors amid global tariff uncertainty, a full UK-U.S. Free Trade Agreement remains distant. The deal was aided by the UK’s decision not to retaliate with its own tariffs and the balanced nature of bilateral trade. Behind the scenes, Peter Mandelson, a former EU trade commissioner, played a key role as UK ambassador to Washington.

Starmer admitted the deal’s timing surprised him, as he spoke with Trump during a Champions League match. While the agreement is welcomed, industry experts urge further progress to restore full trade ties between the long-time allies.